Duff & Phelps Publishes 2014 Canadian Goodwill Impairment Study

3rd Annual Study Results Show Impairment Levels Increased 12.7% Compared to Prior Year with Disproportionate Impact in Materials and Energy Sectors

Duff & Phelps, the premier global valuation and corporate finance advisor, today announced the release of its 2014 Canadian Goodwill Impairment Study(“the Study”), prepared in partnership with Mergermarket. Now in its third year of publication, the Study was compiled using financial information for calendar year 2013 for Canadian-based publicly-traded companies on the Toronto Stock Exchange.

Key highlights include:

  • Canadian publicly-traded companies reporting under IFRS recorded $8.9 billion of goodwill impairments in 2013, an increase of 12.7% from the $7.9 billion reported in 2012.
  • An overwhelming 86% of the aggregate goodwill impairments recorded in 2013 were concentrated in the Materials and Energy industries. Meanwhile, the consumer discretionary industry realized the largest decline (79%) in goodwill impairments in 2013, which declined from $3.3 billion in 2012 to $0.7 billion in 2013.

“Our 2014 Study reveals an uptick in goodwill impairments recognized by the materials and energy sectors. This highlights Canada’s unique exposure to falling commodity and oil prices,” said Paul Barnes, Global Valuation Advisory Services leader of Duff & Phelps. “While it is encouraging that the number of impairment events remained flat year over year, continued uncertainty in the global markets may continue to impact Canadian goodwill impairment levels in the coming year.” 

This year’s Study continues to examine goodwill impairment trends and current regulatory developments. It also provides the results of a survey of hot-button issues for Canadian financial executives related to impairment testing under IFRS, and includes a comparison to key findings from similar surveys included in the 2014 U.S. and European Goodwill Impairment Studies released earlier this year.  

To access the full results of the 2014 Canadian Goodwill Impairment Study, along with the companion studies for the U.S. and Europe, click here.

About Duff & Phelps
Duff & Phelps is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute consulting, M&A and restructuring. The firm’s more than 1,000 employees serve a diverse range of clients from offices in North America, Europe and Asia. For more information, visit www.duffandphelps.com.
M&A advisory and capital raising services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd., which is authorized and regulated by the Financial Conduct Authority.

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