Changes

Management must review the asset value of goodwill every year to determine if it has been "impaired".  If it is determined that the goodwill has been impaired, it must be reduced or, in some cases, completely written off.  An impairment may occur for any reason; for example, a company purchases another company which has several government contracts, but later the purchased company fails to win the contract renewals and has difficulty winning new business.

Management must review the asset value of goodwill every year to determine if it has been "impaired".  If it is determined that the goodwill has been impaired, it must be reduced or, in some cases, completely written off.  An impairment may occur for any reason; for example, a company purchases another company which has several government contracts, but later the purchased company fails to win the contract renewals and has difficulty winning new business.

[[Category:Accounting]]

[[Category:Accounting Terms]]