Industry Insights

Goodwill Impairment Test Simplified

February 2017

The Financial Accounting Standards Board’s simplification initiative has extended to accounting for goodwill. Step 2 of the goodwill impairment test is eliminated and entities will use a one-step goodwill impairment test that compares a reporting unit’s fair value with its carrying amount to identify the existence of potential impairment and the amount of impairment loss. Entities are permitted to apply the guidance to any impairment tests performed after January 1, 2017. 

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