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Description

Impairment Testing: Building, Justifying and Documenting the Discount Rate

Build a defensible discount rate and document the judgements applied in your impairment test

  • 0.43 days — 3 h
  • In-person or virtual
  • Intermediate
  • Up to 6 participants

The discount rate carries most of the judgement in an impairment test. A movement of a few basis points shifts the recoverable amount and can reverse the conclusion. Teams often carry forward the prior-year rate without re-examining its components or recording the sources used. The external auditor then asks for support that simply does not exist.

This three-hour virtual workshop breaks down how the rate is built: capital structure, cost of equity, cost of debt and adjustments specific to the unit being tested. It addresses consistency between the rate and the projected cash flows, then the assembly of the supporting file.

Learning objectives

  • Break down the components of a discount rate
  • Build the cost of equity and the cost of debt of the entity being tested
  • Adjust the rate for risks specific to the cash-generating unit
  • Check the consistency between the rate selected and the nature of the projected cash flows
  • Document sources and assumptions for audit purposes

What makes this programme different

The rate is built component by component on a fully quantified case
Consistency between the nature of the cash flows and the nature of the rate is explicitly tested
The supporting file expected by the auditor is assembled during the session

Programme

1The Rate Within the Logic of the Test

Understanding what the rate represents

  • Role of the rate in measuring the recoverable amount
  • Distinction between pre-tax and post-tax cash flows
  • Consistency between the currency of the cash flows and the rate applied
  • Sensitivity of the conclusion to the rate used

2Building the Components

Assembling the rate piece by piece

  • Cost of equity and the market parameters used
  • Cost of debt and the reference capital structure
  • Selecting a sample of comparable companies
  • Risk premiums specific to the activity being tested

3Justifying and Documenting

Making the judgement defensible

  • Traceability of sources and extraction dates
  • Sensitivity analysis and presentation of results
  • Consistency with the prior-year rate
  • Content of the memorandum provided to the auditor

Who is it for

Consolidation managers, management controllers, group accountants and internal auditors involved in impairment testing.

Prerequisites

Familiarity with the principle of impairment testing and with the notions of recoverable amount and cash-generating unit.

Dates & locations

12 scheduled dates between November 2026 and December 2027. Seats are confirmed in the order enquiries are received.

November 2026

December 2026

January 2027

February 2027

March 2027

April 2027

May 2027

June 2027

September 2027

October 2027

November 2027

December 2027

None of these dates suit you? We open additional sessions on request, and any programme can be run privately for your team.

Practical details

Before the programme
Online positioning questionnaire. Your development objectives are shared with the trainer, who tailors the practical case studies to your context.
Teaching methods
Theoretical input, workshops and practical case studies. Digital course materials and method sheets provided.
Assessment
Multiple-choice tests and role-play exercises. Assessment of learning at the start and end of the programme, with immediate and 60-day follow-up evaluations.
After the programme
One year of access to the e-learning platform. Self-assessment of the skills acquired and a 30-day follow-up session with your trainer.
How to register
Registration online or on the basis of a quotation.
Lead time
11 working days after confirmation of registration.
Accessibility
Accessible to people of determination. Contact our accessibility coordinator to design a suitable solution: contact@mpf-academy.ae
Start dates
Rolling intake: in addition to the scheduled sessions, this programme can start on request.