How to measure goodwill impairment

Description

Abstract: Under U.S. Generally Accepted Accounting Principles (GAAP), public companies that report goodwill on their financial statements must test it at least annually for impairment. This article suggests that even companies opting to avoid quantitative testing by conducting “qualitative” impairment assessments hire a professional valuator. A sidebar notes that, while private companies can now elect to amortize goodwill and certain intangible assets acquired in business combinations, some larger private companies may continue to test for impairment.