Impairment test makeover — Requirements for testing goodwill are revised

Description

Abstract: This past September, the Financial Accounting Standards Board (FASB) revised the requirements for testing goodwill impairment for public and private entities. Because the new qualitative pretest is optional, managers and directors may wonder if they still need an outside appraiser to gauge impairment. This article reviews the basics of goodwill impairment and lists some particulars of the FASB update. Because the new pretest introduces an element of uncertainty to reporting goodwill and other intangibles, an outside opinion by a valuation professional can provide needed guidance and support.