Goodwill Impairment
We provide goodwill, intangible and long-lived asset impairment testing.
After initial recognition, goodwill and indefinite-lived intangible assets often need to be tested for impairment either annually, or upon the occurrence of a triggering event.
RwE has developed an in-depth understanding of the valuation requirements and key areas of concern to auditors and regulators. 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 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.
We can assist with a variety of issues in determining the recoverability and fair value measurement, as required, of long-lived assets, including:
- Identification of the appropriate 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.
