Various requirements in competing a goodwill impairment test:
• Understanding the accounting rules, related concepts, terminology and implementation issues;
• Determination of reporting units;
• Development of the reporting unit valuation model(s);
• Documentation requirements related to goodwill impairment and intangible asset
impairment testing;
• Performing market and industry research to support valuation assumptions;
• Determination of appropriate discount and capitalization rates;
• Establishing effective data collection processes to aid in regular evaluation of impairment testing;
• Reviewing valuation analysis, including valuation assumptions and calculations.
Many companies are able to provide all of the above services internally. Others may engage a CPA or valuation firm. Services offered by a valuator will be subject to the independence rules of applicable CPA Societies.C.A. Institutes and regulatory bodies such as Securities Commissions.
