Goodwill Impairment Testing: From Simple Standards to Complex Compliance

Financial Institutions

November 01, 2012
by Don Anders, ASA, MBA

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Don Anders Don Anders, ASA, MBA
Director - Business Valuation Services

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For today’s banks, meeting the requirement for goodwill impairment testing can be a time-consuming process. Specifically, goodwill of a reporting unit should be tested at least annually.

FASB ASC 350 (formerly SFAS 142), Goodwill and Other Intangible Assets, includes a two-step process to test for and measure impairment of goodwill and other non-amortizing assets. But a recent FASB standard gives companies the option to conduct a qualitative assessment and potentially forego the required two-step process. Could your bank elect the option? Should it?


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