Did your balance sheet get high under IFRS?

It has been a challenging business environment for cannabis companies post legalization. The black market is still thriving, and pricing and volumes have, for the most part, fallen short of expectations. In addition, in an effort to acquire market share along the way, many cannabis companies made acquisitions, which resulted in significant intangible assets and goodwill being recorded on balance sheets. In light of the challenges facing the industry, including the recent declines in many cannabis companies share prices, impairment testing will be facing increased scrutiny by auditors.

BDO's Valuation & Accounting Advisory team is available to assist you with the impairment testing requirements under IFRS. Our article sets out the basics of impairment testing, including some questions that Canadian cannabis companies should be able to answer with respect to their impairment testing under IFRS.

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