Goodwill impairment includes a long process with several decisions, including the composition of reporting units, the potential election of the Accounting Alternative for private companies,1 and the adoption timeframe of the new guidance communicated in ASU 2017-04 (FASB 2017). The case text purposefully does not provide students with information about the company's elections with regard to the alternative and adoption decisions. Furthermore, the case is intentionally vague with regard to the grouping of the two companies for reporting purposes. This was done for two reasons. First, this lack of information prevents students from anchoring upon case facts to develop their decision framework for Requirement 1. The first requirement asks students to develop a process that addresses different types of situations and, thus, it is important that students consider the variety of scenarios that become relevant due to the guidance in Topic 350, Subtopic 20, (the Goodwill subtopic...
Is a Reported Goodwill Impairment Loss Really a Goodwill Impairment Loss? A Financial Reporting Case on Evaluating the Efficacy of Authoritative Guidance
We thank Valaria P. Vendrzyk (editor), Mark Kohlbeck (associate editor), and two anonymous reviewers for their guidance throughout the review process. We appreciate the perspectives offered by Paul Bahnson (Boise State University) and Joshua Herbold (University of Montana) for improving the case materials. We also thank Xiaoqing Huang for her help in the data collection and formatting of the manuscript.
An earlier version of this case was presented at the 2018 Northwest Accounting Research Group (NWARG) meeting in Leavenworth, WA. We are grateful for the feedback provided by the conference participants.
Please do not make the Teaching Notes available to students or post them on websites.
Supplemental materials can be accessed by clicking the links in Appendix A.
Editor's note: Accepted by Valaria P. Vendrzyk.
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Casey J. McNellis, Walter R. Teets; Is a Reported Goodwill Impairment Loss Really a Goodwill Impairment Loss? A Financial Reporting Case on Evaluating the Efficacy of Authoritative Guidance. Issues in Accounting Education Teaching Notes 1 August 2019; 34 (3): 29–40. https://doi.org/10.5555/iace-52460tn
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