Measuring goodwill impairment to get easier

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In depth , PwC US Feb 13, 2017


We’ve summarized what you need to know about the FASB’s new guidance to simplify goodwill impairment testing.

On January 26, 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.

The revised guidance eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment loss will instead be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.

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David Schmid

IFRS & US Standard Setting Leader, National Professional Services Group, PwC US

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