Impairment Testing

Following an acquisition, goodwill must be tested at least annually for impairment under FASB ASC 350. Navigating the impairment testing process requires both technical expertise and practical judgment — the rules have evolved significantly over the years, and not every situation calls for the same approach. Cogent Valuation advises clients on the full range of options available under current standards, including when a full quantitative Step 1 analysis is warranted, when a Step 0 qualitative assessment may be a viable and cost-effective alternative, and when the ASU 2014-02 election to amortize goodwill rather than test annually may be the right choice for a private company. Our Managing Directors work directly with clients and their auditors to determine the most appropriate path and execute it with the documentation required to withstand scrutiny.