Defining Issues | April 2017
Some companies need to apply the same impairment model consistently to all goodwill impairment tests performed within a fiscal year.
In informal discussions with KPMG, the FASB staff have clarified certain aspects of the effective date of the simplified goodwill impairment test. Companies need to apply the same impairment model consistently to all goodwill impairment tests performed within a fiscal year, except for interim tests performed as of a date before January 1, 2017.
ASU 2017-04
EXAMPLE 1
Facts
Analysis
Company may early adopt the simplified goodwill impairment test for the annual impairment test on July 1, 2017 even though it performed a two-step interim test during the same fiscal year. This is because the interim test was performed as of a date before Jan. 1, 2017.
EXAMPLE 2
Facts
Analysis
The company is prohibited from early adopting the simplified impairment test for its annual goodwill impairment test on July 1, 2017. This is because it needs to apply the same impairment model to all impairment tests within the same fiscal year, unless an interim test was performed before Jan. 1, 2017. In this example, the interim test was performed after Jan. 1, 2017.
EXAMPLE 3
Facts
Analysis
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