Qualitative goodwill impairment assessment

A roadmap to applying the guidance in ASU 2011-08

This publication addresses considerations related to adopting and performing a qualitative assessment of goodwill impairment in accordance with FASB Accounting Standards Update No. 2011-08, "Testing Goodwill for Impairment." Key topics discussed include:

  • Establishing and documenting the facts that are relevant to reporting units and goodwill balances.
  • Updating processes and related internal controls in response to the guidance in ASU 2011-08.
  • Identifying reporting units that bypass step 0 and proceed to step 1 of the traditional two-step impairment analysis.
  • Evaluating events and circumstances to support an assertion that it is not more likely than not (MLTN) that the fair value of a reporting unit is less than its carrying amount.
  • Documenting the conclusions reached in the qualitative assessment.
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