Difference between revisions of "Account for Goodwill Impairment"
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Goodwill is an accounting concept that is used when dealing with acquisitions. When one company acquires another entire company, the purchase price is likely to exceed the total value of the acquired firm's net identifiable assets. This difference between the purchase price and the firm's market value is called goodwill. Every year, it is important to "test" goodwill to ensure that it is not overstated. Learning how to account for goodwill impairment is a matter of using a relatively simple impairment test. | Goodwill is an accounting concept that is used when dealing with acquisitions. When one company acquires another entire company, the purchase price is likely to exceed the total value of the acquired firm's net identifiable assets. This difference between the purchase price and the firm's market value is called goodwill. Every year, it is important to "test" goodwill to ensure that it is not overstated. Learning how to account for goodwill impairment is a matter of using a relatively simple impairment test. | ||
| − | [[Category:Accounting and Regulations]] | + | [[Category: Accounting and Regulations]] |
== Steps == | == Steps == | ||
===Understanding Goodwill Impairment=== | ===Understanding Goodwill Impairment=== | ||
