Overview

The PDMM Goodwill Valuation & Impairment Model is a robust and professionally structured Excel tool built to perform purchase price allocation (PPA), goodwill computation, and impairment testing in line with IFRS 3 and IAS 36 standards.

This model automates the entire workflow — from acquisition accounting to value-in-use (VIU) calculations and recoverable amount determination — providing finance professionals with a complete, transparent, and audit-ready solution.

Purpose of the Model

This model helps businesses and advisors determine:

The amount of goodwill arising from an acquisition (under IFRS 3).
The allocation of goodwill to Cash-Generating Units (CGUs).
Whether goodwill impairment is required under IAS 36.
The recoverable amount based on VIU and/or FVLCD methods.

It can also be used as a valuation model for scenario planning, acquisition due diligence, or annual impairment reviews.

Key Features

IFRS-Compliant Framework

Follows IFRS 3 (Business Combinations) and IAS 36 (Impairment of Assets).
Fully transparent assumptions and calculation structure.
Step-by-step workflow with built-in integrity checks.

Dynamic DCF Valuation

Calculates Value-in-Use (VIU) for each CGU.
10-year forecast horizon (Pro version) or 5-year (Basic version).
Integrates CAPM-based WACC, perpetual growth rate, and discounting factors.

Multi-CGU Functionality

Analyze up to 5 CGUs simultaneously (Pro version).
Each CGU has its own revenue, margins, capex, working capital, and terminal value assumptions.

Scenario Analysis

Built-in Base / Bull / Bear scenarios for sensitivity and stress testing.
Separate controls for discount rate and growth rate assumptions.

Visual Dashboards & KPIs

Professionally designed Dashboard sheet with live charts:
- Goodwill allocation
- FCF trends by CGU
- Carrying vs. Recoverable comparison
- VIU distribution
- Sensitivity heatmap (WACC × g∞)
Auto-updating visuals and summary outputs.

PPA & Acquisition Accounting

Detailed Purchase Price Allocation (PPA) section for identifying intangible assets and liabilities.
Auto-computes total goodwill, NCI adjustments, and FV reconciliations.

Built-In Validation Checks

Automated alerts for negative goodwill, out-of-range WACC/g∞, and data inconsistencies.
Ensures all CGUs and total goodwill reconcile perfectly.

Model Structure

Sheet Purpose

Instructions
- User guide, navigation, and color legend
Inputs & Scenarios
- Key assumptions, WACC, growth rates, and scenarios
PPA & Goodwill
- Acquisition accounting, FV of assets & liabilities, goodwill calculation
CGUs
- Allocation of goodwill to each CGU
DCF (CGU VIU)
- 10-year discounted cash flow for each CGU
Impairment (CGUs)
- Recoverable amount, impairment loss, and carrying comparison
Sensitivity
- WACC × g∞ matrix with heatmap visualization
Dashboard
- Interactive charts and executive summary
Checks
- Integrity validations and tie-outs

Key Calculations

Goodwill = Purchase Consideration + NCI + FV of Previously Held Interest − FV of Identifiable Net Assets
FCF = NOPAT + Depreciation & Amortization − Capex − ΔWorking Capital
Terminal Value = FCFₙ × (1 + g∞) / (WACC − g∞)
VIU = Σ (FCF / (1+WACC)ᵗ) + Terminal Value discounted to present
Impairment = MAX(0, Carrying Amount − Recoverable Amount)

Who Can Use This Model

Financial Analysts & Valuation Specialists
Audit & Assurance Professionals
Corporate Finance & FP&A Teams
Investment Bankers & M&A Advisors
Business Owners performing goodwill tests

Editions

Basic (Free) 5-year single-CGU model with basic charts and checks.
Pro (Paid) 10-year multi-CGU version with full scenario engine, dashboard, and executive summary.

Need a Custom Financial Model?

If you need a customized version of this model or would like to request a different financial model (for any industry or purpose), feel free to reach out directly.

PDMM can develop advanced Excel-based financial models — including feasibility studies, valuation templates, IFRS-compliant frameworks, and business forecast tools — tailored to your exact requirements.