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The Goodwill Impairment Dilemma

What happens when U.S. GAAP and IFRSs clash?


For acquisitive companies, determining whether goodwill booked in transactions has become impaired and if it has, by how much, is now a fairly regular occurrence. Differences in the goodwill impairment standards under U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRSs) may create significant disparities as to whether goodwill is viewed as impaired and, if so, how much is written off in the United States and the other country, or even country to country.

Dealing with inconsistencies from market to market can be even more perplexing. Whatever the situation, companies operating across the global economy continue to face the challenge of differing applications of valuation methodologies and accounting principles under U.S. GAAP and IFRSs, local country GAAP, and even country to country under IFRSs regarding goodwill impairment testing.

The goodwill impairment dilemma: What happens when U.S. GAAP and IFRSs clash? explores at a high level the challenges companies may face in performing goodwill impairment testing both in the United States and around the world.


As used in this document, “Deloitte” means Deloitte LLP [and its subsidiaries]. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


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