Goodwill

--> not amortized

[asc 350-20-35-1]

--> tested for impairment

at the level of a reporting unit

Impairment Loss

--> two step approach

--> step 1: impairment test for a reporting unit

step 2: impairment test for goodwill

Step 1

--> is (a) < (b)?

(a) fair value of a reporting unit

(b) carrying amount of a reporting unit

--> if yes, go to step

Step 2

--> is (c) < (d)?

(c) implied fair value of goodwill of the reporting unit

(d) carrying amount of goodwill of the reporting unit

--> if yes, impairment loss is recognized

"Reversal" of impairment loss is not allowed.

 [asc 350-20-35-13]

[IFRS]

IAS 36: Impairment of Assets

Goodwill impairment test

[IAS 36-pr 80-108]

1. Goodwill is allocated to Cash Generating Unit (CGU)

2. Impairment test for CGU: Is recoverable amount < carrying amount?

3. Impairment loss of CGU

--> allocated to reduce the carrying amount of goodwill, first

--> then, allocated to other assets

[U.S. GAAP]

asc 350-20

1. Impairment test for "reporting unit"

--> Is fair value of reporting unit < carrying amount?

2. If yes, impairment test for "goodwill"

--> Is implied fair value of goodwill < carrying amount?

3. If yes, impairment loss for goodwill is recognized.