In 2002, the FASB concluded that the amortization of goodwill should no longer be required, and instead
Question:
In 2002, the FASB concluded that the amortization of goodwill should no longer be required, and instead that goodwill be subject to an annual impairment test to verify that its value had not materially declined. If a decline in value is observed, the goodwill account is written down and an “impairment loss” is recorded on the income statement.
In a 2012 study of goodwill impairment, Duff & Phelps found that Bank of America and AT&T had among the highest impairment charges in 2011. Discuss how Bank of America and AT&T will account for the goodwill write-down in their financial statements. How will the impairment charge affect the firm’s book value? How will the impairment charge impact the firm’s sustainable earnings?
Step by Step Answer:
Financial Accounting For Executives And MBAs
ISBN: 9781618531988
4th Edition
Authors: Wallace, Simko, Ferris