Impairment of Goodwill

[Adeolagl]

My client has goodwill in its books as at year end which arose from business combination. my understanding is to carry out a subsequent review by performing impairment test on the goodwill. what are the information i need to enable me carry out this task, how do i go about getting the information and how do i calculate the impairment test on the goodwill.

I Iook forward to your prompt response.

Thanks so much

 

[Steve-LevelUp]

I have never done this myself, but you would generally ask management and take their advice (and get it in writing). You would want to ask things like, has there been a significant shift in the market? Have revenues related to the goodwill declined sharply? Is there any reason for management to believe that goodwill would be impaired?

 

[bklynboy]

Dont know what basis of accounting you use but if using something similar to US GAAP you have to compare FV versus BV. There is both a qualitative and quantitative component to evaluation and you need to document the entire evaluation process for your auditors. See this link for a basic overview

http://www.bakertilly.com/insights/fasb-issues-simplified-standards-for-goodwill-impairment-testing/