CMA Decision No. 16/Chairman of 2025 · UAE Federal
Regulates goodwill in listed local public joint stock companies whose intangible assets include goodwill, including valuations of such companies targeted for acquisition or involved in a merger.
Decision No. 16/Chairman of 2025 sets rules for how UAE listed public joint stock companies (PJSCs) recognise, test and disclose goodwill, the intangible asset recorded in their financial statements under international accounting standards when they acquire a business. It applies to listed local PJSCs whose intangible assets include goodwill and to valuations of a listed PJSC that is the target of an acquisition or party to a merger and carries goodwill (Article 3). It was issued on 21 July 2025 and came into effect three months after issue (Article 8), that is in October 2025. It is in force and unamended.
Article 1 states three aims: proper recording and valuation of goodwill under international standards, clear bases that help boards, audit committees and external auditors meet their obligations, and better disclosure to investors of what makes up goodwill in a business combination.
Article 4 requires goodwill to be recognised under IFRS, under AAOIFI standards for Sharia-compliant companies, and with regard to international sustainability standards for companies exposed to climate-related risk. The notes to the financial statements must disclose the value of goodwill, the factors that make it up, changes since the last disclosure and the expected benefits of the combination. Disclosed goodwill may not include the effect of future restructuring or performance improvements.
Article 5 requires an impairment test every year, and whenever there are indicators of impairment, supported by internal controls, adequate expertise and, where needed, an independent external specialist with no link to the board or management. Assumptions must be neutral, based on the latest data, reasonable and supportable, and backed by internal and external evidence; climate and sustainability risks must be considered in the sensitivity analysis. Impairments, key assumptions and any departure from past experience must be disclosed, and test records kept for at least ten years. Central Bank licensees follow Central Bank rules where they conflict (Article 6). Breaches attract the administrative penalties set by Cabinet resolution under the Commercial Companies Law (Article 7).
Listed local public joint stock companies whose intangible assets include goodwill, their boards, audit committees, executive management and external auditors, and valuers of listed PJSCs targeted for acquisition or involved in a merger.
English official text in 8 articles. Open the full text or jump to a provision:
| Article 1 | Sets the objectives: proper recognition and valuation of goodwill under international standards, clear bases for boards, audit committees and auditors, and transparency for investors. |
| Article 3 | Applies to listed local PJSCs whose intangible assets include goodwill and to asset valuations of listed PJSCs targeted for acquisition or involved in a merger. |
| Article 4 | Goodwill must be recognised under IFRS (AAOIFI for Sharia-compliant companies), disclosed with its components and changes, and must exclude the effect of future restructuring or performance improvements. |
| Article 5 | Requires an annual impairment test, and a test whenever indicators arise, with internal controls, independent experts where needed, neutral and supportable assumptions, sensitivity analysis and ten-year record keeping. |
| Article 6 | PJSCs licensed by the Central Bank follow the Central Bank's goodwill requirements where these conflict with the decision. |
| Article 7 | Applies the administrative penalties in the Cabinet resolution issued under the Commercial Companies Law to any violation, without prejudice to more severe penalties. |
| Article 8 | The resolution comes into effect three months after its issue date of 21 July 2025. |
Article 7 applies the administrative penalties set by the Cabinet resolution issued under Federal Decree-Law No. 32 of 2021 on Commercial Companies to any breach, without prejudice to more severe penalties under other laws. The decision itself does not fix fine amounts.
This decision mainly concerns listed companies and their auditors, but it reaches our clients when they sell a business to a listed PJSC, or buy into one, because the goodwill booked on the deal and its annual impairment test drive the reported value. Polaris is not licensed by the CMA. In transaction work we make sure the target group's corporate records, ownership history and accounts are in a state that supports the purchase price allocation, coordinate with the buyer's auditors and valuers, and keep the seller's holding structure, UBO and tax filings consistent with the deal.
| Cites | Commercial Companies Law · Former SCA Law |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
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