Goodwill Impairment Single Step Test (ASU 2017-04)

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This video shows how to calculate a goodwill impairment using the single-step goodwill impairment test outlined by Accounting Standards Update 2017-04 (U.S. GAAP). Under the single-step test, you compare the fair value of the reporting unit to the carrying value (the value on the Balance Sheet). If the fair value is lower than the carrying value, the difference is recognized as a goodwill impairment (this reduces Net Income). However, the amount of any goodwill impairment is limited by the amount of goodwill that is on the Balance Sheet.-
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Опубликовано:

13 сен 2024

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Комментарии : 30

@vwright1436 6 месяцев назад

I love your videos. I watched your videos in 2015 when I studied accounting degree. Doing my CPA now and I am still watching your videos. They are bs free, straightforward and right to the point!

@GoodComedian2011 5 лет назад

The best accounting teacher

@yvonnenguyen2058 3 года назад

You are literally my professor. I love y'all. Thank you so much

@Edspira 3 года назад

Happy to help!

@chow902 Год назад

Thank you Edspira. I have used many of your videos in my online course work, and you have taught me sooo much.

@Edspira Год назад

I'm so happy to hear that! I hope your courses are going well!

@patrickqueen6558 3 года назад

wowowoowowow only took 5 mins for me to understand this!!! you are the best~~

@gianlucalamonaca7912 4 года назад

Thank you for your explanations. In case number 2 where FV= 10'000. Thus total impairment is 100'000-10'000=90'000. We need to proceed as follows Impairment goodwill = 45'000 than the remaining 45'000 is allocated pro-rata to the FV of other asset recognized on the BS.

@franciskastevany620 3 года назад

I never think that I should go to youtube to learn about impairment in my 3rd and 4th sem.... and now I'm in 8th sem regretting everything bcs I could just learn this for 5minutes instead of reading the book for 2hours and still cant even get an A-.....

@mariag1926 5 лет назад

Thank GOD for chimp bicycles ! lol ... just learned how to do this for my test. EASY!

@MyFinancialFocus 2 года назад

Goodwill impairments hit hard for those companies that hold like 30% of their total assets in goodwill.

@iamChronoz 7 лет назад

perfect. just what i needed. thank you~!

@Edspira 7 лет назад

No problem. Thanks for watching!

@flake8382 2 года назад

Michael - I read your story on your website. I come from a similar background. Not one or violence myself, but one of abject poverty. So thanks for what you do - Education is important and can drastically change life outcomes. Question: If the impairment can be identified to a specific asset in the CGU, do we write down that asset as impairment loss prior to adjusting Goodwill? Or is it always goodwill to be impaired first?

@bmanq2234 4 года назад

great explanation as always!

@dhruvmalhotra1465 Год назад

Thank you Edspira. Does the $80,000 in fair value one year later include goodwill? What are the components of the $80,000 in fair value? Many thanks.

@Playlist1Lana 5 лет назад

Thank you so much!! Really helped me!

@zackd7597 2 года назад

What about the 55,000? Why isn't there goodwill impairment for that since the we paid 100k but the FMV is 55k?

@karemfigo5830 2 года назад

in case I have in the balance sheet of the company I acquired a subsidiary good will how can I calculate the impairment?

@seanbonvie7983 4 года назад

So if the Fair Value one year later was say 110,000. Would there be no impairment ? In other words what would you have to do in the situation ?

@samuelkwon5824 6 лет назад

Could you explain what a reporting unit is? (i.e. Parent Company purchases Subsidiary Company at 80%. Purchase Price 100, FVNA of Subsidiary is 80, Goodwill at 20*80%=16. What is the reporting unit? Is this a department in the Subsidiary Company? A section of its assets on its balance sheet? No good RU-vid video regarding this.)

@PereirfPereirf 4 года назад

how to establish the fair value without paying for an appraisal report?

@louis_iii 4 года назад

I had no idea Chef John does accounting too.

@CDProclaim180 7 лет назад

Hi Edspira, can they ever be a recovery of impairment on goodwill after the first year.

@bevan185 4 года назад

I am interested in buying shares in Chimp Bycycles

@conganhhangoc6857 Год назад

i have no idea why its have to be chimp bike but it sticks

@lostheroes8704 4 месяца назад

what happens let's say if my impairment loss is 65000 and my goodwill is 90,000. and I have other assets in my balance sheet as well. how do I allocate my impairment loss

@kaibaing4288 2 месяца назад

Entire allocated to Goodwill

@cyrilyaghi7448 3 года назад

Sorry if my question may sound dumb as I know nothing about accounting, but what happens if the fair value of Chimp Bicycles becomes say $120,000 instead of $80,000.