Hot Topic | March 2020

COVID-19 increases risk of impairment of goodwill and long-lived assets

As part of the overall analysis of the financial reporting impacts of COVID-19, companies may need to evaluate the recoverability of goodwill, intangible assets, property, plant and equipment, and lease right-of-use (ROU) assets. 


  • All companies 

Relevant dates

  • Effective immediately  

Key impacts

The COVID-19 outbreak is having a significant impact on global markets and its effects may trigger the need for companies to evaluate the recoverability of nonfinancial assets.

General questions that companies may be asking include:

  • Has our supply chain been disrupted so that we cannot procure raw materials or components for finished goods?
  • Has volatility in commodity prices negatively impacted revenues or production costs?
  • Have workforce limitations impeded our ability to manufacture products or service our customers?
  • Have we provided concessions to our customers that exceed normal business practice?
  • Have we lost business due to event cancellations, store or facility closures, lower consumer sentiment, etc.?
  • Are operations being curtailed temporarily, or assets mothballed?
  • Are our customers struggling to pay their obligations or even remain in business?
  • Has our stock price significantly decreased?

Report contents

  • Background
  • Goodwill
  • Other assets
  • Subsequent events

Related content

Lease accounting impacts of the COVID-19 virus

Financial reporting impacts of coronavirus


Spotlight on contributors

Justin Miller

Justin Miller

Managing Director, Dept. of Professional Practice, KPMG US

Julie Santoro

Julie Santoro

Partner, Dept. of Professional Practice, KPMG US



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