Goodwill is treated as an intangible, long-term asset account held on the balance sheet. It is not depreciated or amortized, but it is subjected to a regular test for impairment to make sure the account balance is not overstated.
When the carrying value exceeds the fair value, then the goodwill is considered to be impaired. Performing goodwill impairment testing is extremely vital for all types of businesses especially for those who have acquired the goodwill through transactions. It is imperative to confirm whether there has been any impairment in the goodwill and, if it has, the impairment loss needs to be measured and recognized.
As a result, from an accounting perspective, it is advised that goodwill impairment tests must be conducted once every year using accurate methodologies specified by Financial Accounting Standards Board (FASB) ASC 350.
ValuLink analyses the industry our client firm and its underlying reporting units operate in, as well as the general market trends and economic conditions. ValuLink performs careful evaluation of the relevant facts and circumstances and assists our clients with impairment testing on a regular basis. ValuLink’s in-depth intangible asset valuation expertise assures our clients accurate results for their goodwill impairment testing.
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