Should Document It Carefully and Professionally. Example of the Impairment Test a Software Solutions Provider Buys a Start-up That Has Developed an Innovative App. The Purchase Price is Above the Market Value. This Difference is Called “ Goodwill ” Because Buyers Show Their Good Will When Making a Purchase. They Accept the Existing Difference Because They Will Make Future Profits With the Acquired Resources.



This Goodwill is Subject to an Annual Impairment Test So That Buyers Can Determine Any Reductions in Value. Example Calculation : Asset Value of the Start-up : 2 Million Euros Purchase Price/book Value : 5 C Level Contact List Million Euros Goodwill : 3 Million Euros a Goodwill Impairment Test is Carried Out After One Year . This Results in a Value in Use of 3 Million Euros and a Net Selling Price of 4 Million Euros. The Recoverable Amount is Therefore 4 Million Euros, Which Corresponds to a Goodwill Impairment of 1 Million Euros.





This Amount Must Now Be Written Off. t Test on Numerous Occasions It is Important to Carry Out an Impairment Test According to Ifrs. This Allows Depreciation to Be Organized Professionally and Sensible Business Decisions to Be Made. In Addition to Scheduled Impairment Tests, Unscheduled Tests Should Be Carried Out to Determine Value in Certain Situations. New Call to Action Cover Image: Sanjeri / Istock / Getty Images Plus Originally Published August 16, 2022, Updated January 20, 2023 Subjects