Goodwill Impairment Analysis and Memo
Below is a sample goodwill impairment analysis memo. If you need more detail analysis. Please free to contact us.

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DESCRIPTION OF TRANSACTION

Description of transaction giving rise to recording of goodwill. The acquisitions were accounted for in accordance with FAS Statement No. 141R which was codified under the “Business Combinations topic of the FASB ASC.

Describe how the purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair value at the date of acquisition. The allocation of purchase price included identifiable intangible assets and goodwill which was valued at the date of acquisition by an independent valuation firm, [Insert Valuation Firm Name Here] using generally accepted valuation practices. The “Intangible – Goodwill and Other” topic of the ASC provides that goodwill should no longer be amortized but instead tested for impairment at the reporting unit level.

DESCRIBED ENTITIES
Where headquartered. Description of business.

GOODWILL IMPAIRMENT TESTING

Under the “Intangible – Goodwill and Other” topic of the ASC, goodwill is required to be tested for impairment annually at the reporting unit level in lieu of being amortized. Also, goodwill is required to be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has occurred. Examples of such events or circumstances include:

(i) Adverse changes in legal factors, business climate, or regulatory environment,
(ii) unanticipated competition,
(iii) loss of key personnel,
(iv) a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of,
(v) a significant asset group within a reporting unit is tested for recoverability,