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GoodGoodwill Impairment Testing – ASC 350/FAS 142

 
The purpose of these requirements is also to provide investors with an on-going understanding of the performance of past acquisitions by a company. Axiom Valuation is an independent valuation expert with extensive experience in goodwill impairment testing for single business units, companies with multiple business units and companies with multiple, international business units. We provide clients with timely and cost-effective Step 1 and Step 2 (as needed) analyses. We also advise clients on the potential impacts of evolving FAS 142 requirements, and on differences between GAAP and IFRS goodwill impairment testing approaches.
 
These guidelines lay out a two-step process for goodwill impairment testing. The first step is to determine the fair value of the business unit or units. We have extensive experience and expertise in valuing corporations across countries, and identifying the appropriate approaches for determining the fair value of the business divisions. We then test whether the carrying value of the assets being tested is greater than the total market value of the assets of the business unit or units. If the carrying value is greater than the total market value of the unit assets, then there is a determination of impairment.
 
Revaluation of the Assets – Step 2
 
In the second step of the goodwill impairment test (if necessary), we analyze and then value all assets and liabilities of the business. This process follows basically the same approach used in a purchase price allocation, except that we also have to identify and value any unrecognized intangible assets that have arisen since the acquisition. We then determine the allocation of the impairment to the assets, so that the appropriate write-downs can be made for financial reporting purposes.
 
We have extensive expertise in goodwill impairment testing under ASC 350/FAS 142 across many industries. Our work has been vetted by all of the major auditing firms. We are known for our independent, analytically rigorous and well-documented valuations for financial reporting purposes.


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