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Kroll provides valuations of goodwill, indefinite-lived intangibles and long-lived assets for impairment testing purposes pursuant to ASC 350, Intangibles – Goodwill & Other (ASC 350), ASC 360 -10, Impairment or Disposal of Long-lived Assets (ASC 360), as well as International Accounting Standard 36: Impairment of Assets (IAS 36).

ASC 350

After initial recognition, goodwill and indefinite-lived intangible assets are tested for impairment under ASC 350 at least annually, or upon the occurrence of a triggering event. Kroll has developed an in-depth understanding of the valuation requirements of ASC 350, as well as the key areas of concern to auditors and the SEC. Our deep expertise enables us to assist management in identifying areas of impairment risk, while navigating complex corporate structures and their underlying legal entities and/or business divisions.

We can assist you with a variety of issues in the impairment testing of goodwill and indefinite-lived intangible assets, including:

  • Assignment of goodwill, acquired assets and liabilities to reporting units.
  • Support for the optional Step 0 qualitative assessment as part of the goodwill impairment test and as part of the impairment test for indefinite-lived intangible assets.
  • Measurement of the fair value of reporting units, including consideration of market participant assumptions and allocation of shared assets.
  • Estimation of the fair value of the debt of the reporting units to derive their respective equity values when the goodwill impairment test is conducted on an equity level.
  • Comparison of reporting unit values to the overall entity value to assess the implied Market Participant Acquisition Premium (MPAP) (a.k.a. control premium) inherent in the reporting unit fair value measurements.
  • Measurement of the fair value of indefinite-lived intangible assets, including IPR&D.


ASC 360

Kroll has deep experience in the application of ASC 360 and the assessment of the recoverability and fair value of long-lived assets, including property, plant and equipment and finite-lived intangible assets.  

The recoverability of a long-lived asset is assessed individually (or in the context of a group of assets), based on the lowest level of identifiable cash flows that are independent from the cash flows of other assets, and over the economic life of the asset (or the primary asset of the group). If it is determined that the asset (or asset group) is not recoverable, an impairment loss is recognized based on the difference between the carrying amount and fair value of the asset (or group). 

We can assist you with a variety of issues in determining the recoverability and fair value measurement, as required, of long-lived assets, including:

  • Identification of the appropriate ASC 360 asset groups.
  • Analysis of projections to assess whether the undiscounted amounts provide for the recoverability of the asset or group.
  • Measurement at fair value of the asset (or group) using appropriate valuation methods, for those assets (or groups) that fail the recoverability test. 
  • Measurement of the fair values of the assets comprising an asset group, to assist management with the allocation of impairment loss.


IAS 36

IAS 36 requires the testing of goodwill, indefinite-lived intangible assets and long-lived assets within its scope when indicators of impairment exist, or at least on an annual basis for goodwill and indefinite-lived intangibles. Goodwill is tested at a cash generating unit (CGU) level and is a single step test comparing the carrying value of the CGU to its recoverable amount, which is the higher of Value in Use (VIU) or Fair Value Less Costs of Disposal (FVLCD). Goodwill impairment tests under IFRS frequently give materially different results compared to those under U.S. GAAP due to the difference in the frameworks underlying the impairment tests.

Kroll has developed an in-depth understanding of the valuation requirements of IAS 36, as well as the key areas of concern to auditors and regulators. We can assist you in many areas, including:

  • Allocation of goodwill to CGUs.
  • Practical insight on the nuances of the IAS 36 impairment test requirements and its application.
  • Measurement of the VIU and FVLCD of CGUs.
  • Measurement of the fair value of indefinite-lived assets and other assets within the scope of IAS 36 that generate cash flows that are largely independent from those of other assets.
Related Team

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Greg Franceschi
Greg Franceschi
Managing Director and Global Leader Financial Reporting Practice and Office of Professional Practice
Valuation Advisory Services
Silicon Valley
Myron Marcinkowski
Myron Marcinkowski
Managing Director and North American Valuation Services Leader
Valuation Advisory Services
Michael Weaver
Michael Weaver
Managing Director and International Valuation Advisory Services Leader, Testifying Expert
Valuation Advisory Services
Javier Zoido
Javier Zoido
Managing Director, Latin America and Iberia Valuation Advisory Services Leader
Valuation Advisory Services

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