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Goodwill Impairment Evaluation Adds a Flexible Twist
Posted by Kristen Shepley on Thu, May 17, 2012 @ 09:39 AM

Goodwill Impairment Testing can be Qualitative or Quantitative, but Your Business Should Have a Good Explanation for the Former

Goodwill by accounting standards represents the value of a business above and beyond just its financial and physical assets. Many times the business' intangible values are tracked as goodwill, such as the business' good reputation which generates sales by referral. Measurement of goodwill impairment is a two part test that measures the fair value of a Company’s reporting unit to the reporting unit’s carrying value.  The fair value of the reporting unit in the majority of cases is measured with a full-blown business valuation analysis.

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Topics: accounting, goodwill, Tests for Impairment of Goodwill, goodwill impairment, qualitative, methodology, step zero, FASB

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