Can impairment losses be restored under U.S. GAAP?
If the asset is held-for-sale, then losses can be restored (i.e. reversed). However, if the asset is held-for-use, then then impairment losses cannot be restored.
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How is goodwill created?
When a company purchases a company, the buyer acquires the fair market value of the net identifiable assets. Goodwill is considered the excess over fair market value of the purchased assets. For example, if a Vesla (electric car company) pays $5 million for a company with fair market value of net identifiable assets of $4 […]
For goodwill impairment testing, what is the testing level under U.S. GAAP and IFRS?
Under U.S. GAAP, goodwill is tested for impairment at the “reporting unit” level, while under IFRS, the testing is performed at the cash-generating unit (CGU).
Can goodwill be internally generated by a company?
Absolutely not. Goodwill can only be generated through an acquisition or purchase of assets from a 3rd party.