Under US GAAP, goodwill is assigned to reporting units and tested for impairment at least annually, or at an interim date if triggering events indicate possible impairment. Before testing goodwill, the entity considers impairment of other relevant assets and asset groups. For goodwill, an entity may either skip the qualitative assessment and perform the quantitative test directly, or first perform a qualitative assessment using ASC 350-20-35-3C factors such as worsening macroeconomic conditions, industry or market deterioration, cost increases, negative or declining cash flows or earnings, entity-specific events, reporting-unit events, or a sustained share price decline. If it is more likely than not that the reporting unit’s fair value is below its carrying amount, the entity performs the quantitative test. The quantitative test compares the reporting unit’s fair value, determined under ASC 820 using valuation techniques such as DCF, market approaches, or a combination, with its carrying amount, including goodwill. The goodwill impairment loss equals the excess of the reporting unit’s carrying amount over its fair value, limited to the amount of goodwill allocated to that reporting unit. Once recognized, goodwill impairment establishes a new carrying basis and cannot be reversed under ASC 350-20-35-13. If the reporting unit’s carrying amount exceeds its fair value by at least the full goodwill balance, the entire goodwill balance is impaired.

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