Introduction

The unprecedented global financial turmoil which we are currently going through, has virtually wreaked havoc in the global financial systems and the business world at large. Many businesses are suddenly faced with serious issues with regards to profitability, cash flows, funding and asset valuations. With the significant downturn in the level of business activity, resulting in significant losses, companies have to deal with the issue of impairment of their assets, both tangible and intangible.

What were seen as very valuable assets in the good days have suddenly become questionable with regards to their carrying values. When times were good, companies often paid significant premiums on acquisition of companies or businesses. The premiums were often attributed to intangible assets such as goodwill, trade names, brands and so on. Now that these very same businesses have suffered a severe drop in earnings, the once highly valued intangibles now face the grim prospect of being labeled as impaired and subject to potentially severe write downs.

The more hardy tangible assets are also not spared this grief. Tangible assets such as plant and machinery, which once generated significant earnings and cash flows are now struggling to generate sufficient returns to justify their carrying values, hence also subject to potentially severe write downs.

Course Objective

The objective of this one day seminar is to provide participants with an overview of the requirements of FRS 136 and 138 as well as explore, in a practical manner, the implications arising from the current global financial turmoil which has left many companies facing serious impairment issues.

The course also seeks to create awareness of the various types of intangible assets which are inherent in well established businesses which very often the owners and management themselves do not realize exist.

Course outline

FRS 136, Impairment of Assets

• Overview of FRS 136, Impairment of Assets
• Scope
• Definitions
• Identifying an asset that may be impaired
• Recoverable amount
• Recognizing and measuring an impairment loss
• Cash generating units (“CGU”) and goodwill
• Impairment loss for a CGU
• Reversing an impairment loss
• Disclosures
• Transitional provisions and effective date

FRS 138, Intangible Assets

• Overview of FRS 138, Intangible Assets
• Scope
• Definitions
• Intangible assets
• Recognition & measurement
• Measurement after recognition
• Useful life
• Intangible assets with finite useful lives
• Intangible assets with indefinite useful lives
• Recoverability of carrying value – impairment losses
• Retirement & disposals
• Disclosure
• Transitional provisions and effective date

Target Audience : All
CPD Code : 090819KL1

Speaker’s profile

Jega Perumal FCCA CPA CA

Jega has over twenty years of experience in the finance industry, a substantial part of it in the audit profession, having commenced his professional career in London in 1989. After obtaining his ACCA qualification with a firm of Chartered Accountants in London, he returned to Malaysia in 1992 and joined Ernst & Young Ipoh. In 1995, he joined Coopers & Lybrand which subsequently merged with Pricewaterhouse in 1998 and became PricewaterhouseCoopers (PwC). Jega was admitted as an Executive Director of PwC in 2004.

In his career in the audit profession, Jega has had extensive experience in managing the audits of clients listed on stock exchanges as well as large multinational clients including the Malaysian subsidiaries of US SEC registrants. Jega regularly instructed in PwC in house training workshops as well as conducted public workshops on Financial Reporting Standards. Jega has extensive hands on experience with IFRS since 2005 having worked on clients with Hong Kong and Singapore reporting requirements. Jega left PwC in 2006 and joined a group of companies embarking on a listing on the Singapore Stock Exchange (SGX), as Group Finance Director. He led the finance team of this group which completed a reverse takeover (RTO) in 2007 of a company listed on the Catalist Market of the SGX.

Jega is currently Executive Director of SurfVal Advisory, which he founded in January 2009. SurfVal Advisory is an advisory firm which provides advisory services inter-alia, in the areas of financial due diligence, enterprise valuations, valuations of intangibles, M&A negotiation support, transactions structuring, purchase price accounting and FRS training and implementation.

*Claimable Under HRDF – The SBL Scheme: Based on the merit of each applicant