Rethinking the Case of Goodwill Evaluation Based on the Purpose of Asset Impairment Testing
This article is a rethinking of the case study of goodwill impairment assessment based on financial reporting requirements-taking M company as an example.It points out several main problems in the original case study,including goodwill formation,impairment testing,expected future cash flows of assets,fair value measurement,and non-standard expressions.This article first corrects the formation process of goodwill,emphasizing that the purchase of minority equity in subsidiaries should not reconfirm goodwill;Analyzed that impairment testing for goodwill should include all equity goodwill and allocate impairment losses proportionally.Secondly,it was discussed that future cash flow forecasts should be based on the current condition of assets and should not take into account unfulfilled improvements.In terms of fair value measurement,it is suggested to follow the latest accounting standards and prioritize the use of observable market data.Finally,other issues in the practice of goodwill impairment testing and evaluation were raised,such as the positioning of asset evaluation and the reasonable composition of asset groups.It was emphasized that evaluation should focus on the actual value and future cash flows of assets,rather than formal compliance.
Goodwill impairment testAsset evaluationFair value measurementAccounting standards
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