Goodwill Impairment test Excel Template
You’re probably looking for a ready-made template for Goodwill Impairment Test, but all you find is advice or complex rules US GAAP, IFRS, etc. However, there’s no working example or template to fill with your data.
Our Goodwill Impairment Test Excel template will check if Goodwill has been impaired in your company. Moreover, the template will show you whether you should do a test this year, and also what you should pay attention to. The template is simple and accessible, it has 2 types of test.
- Test of indication of impairment
- 2 tests of goodwill impairment in one file
- “How to” sheet
- Macro free Dashboard (Without VBA)!
- Easy to use the model
- Best for private companies
- Modern design
- Light and efficient
- Ready-to-use template
What Is Goodwill?
In general, Goodwill is an intangible asset associated with the purchase of one company by another. Recorded when the purchase price is higher than the sum of the fair value of all assets purchased in the acquisition and the liabilities assumed in the process. It could the value of a company’s brand name, customer base, employee relations, customer relations, and other added value.
What is Impairment?
Impairment describes a permanent reduction in the value of a company’s asset, normally a fixed asset. When testing for impairment, the profit generated by a specific asset is periodically or annually compared with that same asset’s book value. There’s impairment when the book value of the asset exceeds the cash flow or benefit of the asset. Therefore the difference is written off and the value of the asset declines on the company’s balance sheet. The template will support you to answer your questions about the frequency of the goodwill impairment test or what is the discount rate and carrying value.
How about financial reporting standards?
It should be noted that the product is not a financial report template. However, the template was created on the basis of US GAAP (two steps) and IFRS (IAS 36 survey questionnaires) in order to simplify, fast verification, and calculate if there was an impairment of goodwill.
Do you know how to identify a company’s assets?
Check Financial Statement Analysis and take your finances in your hands and analyze your Cash Flow, EBIT, and more indicators!
How to use it?
The use of the product is very easy! You have 2 possible tests to perform:
- Simple – when you know Fair Value
- Extended – when you don’t know Fair Value and need to calculate it
In each test, you must enter the values from the balance sheet, i.e. the values for Assets (including Goodwill value) and Liabilities. For the Extended test, you should provide also Cash Income & Outcome for the current year in order to get Fair Value.
And that’s it!
This is the basis to perform a calculation to check if there’s an impairment and how much loss is there in goodwill.
- Excel file (2007+)
- Info with discount code
- Link to Google Sheets