Two updates to the impairment standards provide an
opportunity for many companies to reduce the cost and complexity of
the annual test. Craig McMillan and John Williamson explain what
you should focus on in implementing these changes.
Annual impairment tests for goodwill and indefinite lived
intangible assets have been challenging and the mandated valuations
were burdensome and required significant effort. Some relief is now
available for companies with the introduction of an impairment
diagnostic test for both goodwill and indefinite-lived intangible
assets. These changes are intended to reduce the cost and
complexity of the annual test.
These amendments are reflected in the Intangibles –
Goodwill and Other section of the FASB Codification Topic 350
through ASU 2012-02, Testing Indefinite-Lived Intangible Assets for
Impairment, and ASU 2011-08, Testing Goodwill for Impairment.
