This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Qualitative goodwill impairment assessment — A Roadmap to applying the guidance in ASU 2011-08

Published on: 16 May 2012

This publication addresses considerations related to adopting and performing a qualitative assessment of goodwill impairment in accordance with FASB ASU 2011-08, Testing Goodwill for Impairment. Key topics discussed include:

  • Establishing and documenting the facts that are relevant to reporting units and goodwill balances.
  • Updating processes and related internal controls in response to the guidance in ASU 2011-08.
  • Identifying reporting units that bypass step 0 and proceed to step 1 of the traditional two-step impairment analysis.
  • Evaluating events and circumstances to support an assertion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount.
  • Documenting the conclusions reached in the qualitative assessment.

The publication is divided into four main sections:

  • Introduction — An overview of key considerations related to the qualitative assessment of goodwill impairment introduced by ASU 2011-08.
  • Adoption Considerations — A summary of questions to consider when adopting ASU 2011-08.
  • Documentation and Process Considerations— A comprehensive description of five steps that entities may consider when adopting ASU 2011-08 and performing the new assessment.
    • Step A: Compile and document relevant historical information about the entity and its reporting units.
    • Step B: Consider updating processes and internal controls upon adopting ASU 2011-08.
    • Step C: Identify reporting units for which an entity may proceed to Step 1 of the traditional two-step impairment analysis.
    • Step D: Assess events and circumstances to determine whether it is MLTN that the fair value of the reporting unit selected for the qualitative assessment is less than the carrying amount.
    • Step E: Determine and document the results of the qualitative assessment performed to test goodwill for impairment.
  • Interim Assessment — A description of considerations related to performing a qualitative goodwill impairment assessment at times other than the annual measurement date.

Download

Related Topics

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.