Under ASC 350, how often must goodwill be tested for impairment?

Answer options:

Only when a triggering event occurs.

Every 3 years.

At the end of every quarter.

At least annually, or more frequently if indicators of impairment exist.

How to approach this question

Rule: Annual test is mandatory. Interim test required if 'triggering events' occur.

Full Answer

D.At least annually, or more frequently if indicators of impairment exist.✓ Correct

ASC 350-20 requires goodwill to be tested for impairment at least annually. It must be tested between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Common mistakes

Thinking it's only event-driven (like PP&E).

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