In informal discussions with KPMG, the FASB staff have clarified certain aspects of the effective date of the simplified goodwill impairment test. Companies need to apply the same impairment model consistently to all goodwill impairment tests performed within a fiscal year, except for interim tests performed as of a date before January 1, 2017.
For annual and any interim goodwill impairment tests performed for annual periods beginning after
Public business entities (SEC filer)
Dec. 15, 2019
Public business entities (non-SEC filer)
Dec. 15, 2020
All other entities
Dec. 15, 2021
Company may early adopt the simplified goodwill impairment test for the annual impairment test on July 1, 2017 even though it performed a two-step interim test during the same fiscal year. This is because the interim test was performed as of a date before Jan. 1, 2017.
The company is prohibited from early adopting the simplified impairment test for its annual goodwill impairment test on July 1, 2017. This is because it needs to apply the same impairment model to all impairment tests within the same fiscal year, unless an interim test was performed before Jan. 1, 2017. In this example, the interim test was performed after Jan. 1, 2017.
Read more fully about ASU 2017-04 in KPMG’s Defining Issues: FASB simplifies goodwill impairment test