Simple Steps of calculating Impairment Goodwill Loss

>> April 2, 2009



These days the accounting term “impairment goodwill loss” is becoming more important in world accounting and I have also received many queries from chartered accountants for explaining what is the meaning of impairment of goodwill loss and how to calculate goodwill impairment loss means what are basic steps about calculating it.

Dear , you know that the main aim of calculating goodwill is to provide some amount of reputation to businessman when he sell his business in market because it is different from tangible assets and it is the part of intangible assets . So special steps are taken for calculating in calculation of Goodwill, the detail are here.

Now, understand the meaning of Goodwill impairment loss first

Definition of Goodwill impairment loss

In general words, if Company’s goodwill is lost his market value then it is called goodwill impairment loss. This world is given under Financial Accounting Standards 142

Steps for calculating goodwill impairment loss

1st Step

When There is no impaired goodwill loss

Positive Goodwill = Fair market Value of company – Carrying Value of company (book value of assets + book value of goodwill – book value of liabilities

fair market value of company = market value of assets - market value of liabilities

2nd Step

There is existence the impaired goodwill loss in business.

Negative goodwill ( Goodwill impaired loss ) = Carrying value of company ( Book value of assets + book value of goodwill- book value of liabilities ) – fair market value of company .

You can also detailed study of steps of goodwill impairment loss with two examples in the PDF file of bizownerhq.com and read summery of 142 of SFAS at http://www.fasb.org/st/summary/stsum142.shtml





You might like:


Follow Us


1 comments:

Accounting Expert April 2, 2009 at 8:19 PM  

For professional, quick and cost efficient service logon to CPA-Expert For a complimentary, no cost, no obligation, initial consultation. We will discuss your financial and tax situation and determine how we can help you reach your goals. For more details on Financial and Tax help in Los Angeles Area.

Post a Comment

About Accounting Education


An educational site with 2500+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile


Type svtuition.org in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us


Contact us Send an Email Phone number and vCard LinkedIn profile Follow us on twitter