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).
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:
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:
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:
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by Louisa Galbo, Anthony Lu