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Goodwill and indefinite-lived intangibles

BAR Chapter 10 · Area II · Blueprint II.A

When one company buys another, it often pays for things that never had a price tag: a brand, a reputation, a loyal workforce. Those become goodwill and other intangibles that may never be amortized, so the only check on their value is the impairment test. The Blueprint asks you to recall the impairment indicators and to calculate carrying amounts, impairment losses and journal entries. Pacific Brands Group has just bought Trailmark Outdoor, and we follow its goodwill and its Trailmark trademark through the years.

In this chapter

1. Intangibles that never wear out
2. How goodwill and intangibles first arrive
3. Signs that value may be impaired
4. Impairment of indefinite-lived intangibles other than goodwill
5. Goodwill impairment
6. Private companies, reporting units and disposals
7. Presentation, disclosure and the carrying amount over time

This chapter has 7 lessons, 50 practice MCQs with explanations and 10 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Impairment indicators
• carrying amount
• impairment entries

Chapter 9: Economic and market influences · Chapter 11: Internally developed software