June 19, 2020
Published: The CAQ
The COVID-19 pandemic and the related market conditions create many new uncertainties for auditors, audit committees, investors and management of public companies. As SEC Chair Jay Clayton recently recognized, the continuing operation of the US capital markets is an essential component of our national response to, and recovery from, COVID-19. Goodwill balances are typically tested annually for impairment or when a triggering even occurs and when necessary, an impairment loss is recognized. Given the nature of goodwill as an accounting estimate, it is an account that can be impacted by volatile economic conditions. This resource is intended to provide a high-level overview of management’s accounting requirements and auditor considerations for testing goodwill impairment in the COVID-19 environment.
This resource is intended as general information and should not be relied upon as being definitive or all-inclusive, or a substitute for PCAOB and SEC rules, FASB accounting requirements, standards, guidance, or other resources.