Inscrivez-vous ou connectez-vous pour rejoindre votre communauté professionnelle.
Amortization
Every year, the carrying value of goodwill must be tested for impairment, according to FASB142. If goodwill is found to be impaired, then it must be reduced through a writedown as a charge against income for the year.
This impairment is done in two steps. The first is to check the carrying value of each operating unit. The carrying value of each unit is compared against its fair market value. If the fair value is higher than the carrying value, nothing happens. If, however, the carrying value is higher than the fair market value, then the excess is charged against goodwill to reduce the carrying value to that fair market value.
As long as the fair market value of the operating units remains above carrying value, goodwill remains unchanged. Theoretically this situation could last for many, many years. This is in direct contrast to earlier GAAP, in which goodwill was amortized (reduced in value) over time.
