Heads Up: FASB Finalizes Amendments on Goodwill Impairment Testing
Volume 18, Issue 25
This Heads Up discusses the FASB’s recently issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment, which amends the guidance in ASC 350-20. Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test would be required.
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