Goodwill & Intangible Impairment Testing
409.AI helps companies prepare expert-reviewed fair value analysis for goodwill, intangible, and long-lived asset impairment tests under ASC 350 and ASC 360.
Goodwill impairment testing under ASC 350 confirms that goodwill recorded from past acquisitions is still supportable, comparing the fair value of a reporting unit to its carrying amount and recognizing a charge when carrying amount exceeds fair value.
At a glance
| Report | Goodwill & intangible impairment testing report |
|---|---|
| Summary | Expert-reviewed impairment testing valuations under ASC 350 and ASC 360, with reporting unit fair value analysis built for auditor review. |
| Price | From $9,999 |
| Jurisdiction | United States |
What is included
- Reporting unit and asset intake context
- Fair value analysis with documented methods and inputs
- Comparison of fair value to carrying amount
- Documentation to support qualitative and quantitative assessments
- Expert-reviewed final valuation report
Frequently asked questions
What is goodwill impairment testing?
Under ASC 350, goodwill recorded from past acquisitions must be tested to confirm its carrying amount is still supportable. The quantitative test compares the fair value of a reporting unit to its carrying amount, and an impairment charge is recognized when carrying amount exceeds fair value.
When is testing required?
At least annually, and between annual tests whenever a triggering event suggests fair value may have fallen below carrying amount. Common triggers include sustained underperformance against forecasts, loss of key customers, adverse market conditions, and declines in comparable company valuations.
What is the qualitative assessment?
Companies can first perform an optional qualitative assessment, sometimes called step zero, to evaluate whether it is more likely than not that fair value is below carrying amount. If it is, or if the company skips the qualitative step, the quantitative test is performed.
How is an impairment measured?
The impairment charge equals the amount by which the reporting unit’s carrying amount exceeds its fair value, capped at the total goodwill allocated to that reporting unit.
Is there a simpler option for private companies?
Yes. Private companies can elect an accounting alternative to amortize goodwill over ten years or less and test only when a triggering event occurs, which can be evaluated at the entity level. Electing it is an accounting policy decision to discuss with your advisors.
What about intangibles and other long-lived assets?
Indefinite-lived intangibles such as certain trade names are tested annually under ASC 350, while finite-lived intangibles and other long-lived assets are tested under ASC 360 when events indicate their carrying amount may not be recoverable.
What do auditors focus on?
Auditors typically test the forecasts behind the income approach, the discount rate, the selection of market comparables, the reconciliation of total fair value to any observable market evidence, and the identification of triggering events.
Is this tax, legal, or accounting advice?
No. The valuation report organizes company-provided information into supporting documentation and should be reviewed with your auditors and qualified advisors.