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Lesson details
- Estimated study time
- 120 min
Learning objectives (4)
The close contains a finite-lived license, an indefinite-lived trade name, and goodwill assigned to the supplied Sensor Systems reporting unit. Calling all three “intangibles” would send at least two through the wrong test.
Route by class and unit
| Item | Supported unit | Core close action |
|---|---|---|
| Finite-lived license | Recognized asset or applicable asset group | Amortization; applicable indicator and impairment path |
| Indefinite-lived trade name | Controlled asset or permitted unit | Life reassessment and applicable fair-value comparison |
| Goodwill | Supplied reporting unit | Reporting-unit goodwill test under declared model |
The Topic 360 held-and-used screen, the recoverability path used for applicable finite-lived long-lived assets, is not a universal gateway. Nor can a reporting-unit fair value be used as the trade name's fair value merely because both appear in one valuation file.
Measure only the stipulated comparisons
The trade name has a supplied $900,000 carrying amount and $760,000 fair value, producing a bounded $140,000 loss. The Sensor Systems reporting unit has a $5,400,000 carrying amount, $5,050,000 fair value, and $700,000 goodwill, producing a $350,000 loss and $350,000 ending goodwill.
Those subtractions do not establish the asset unit, reporting unit, qualitative screen, indicator, valuation method, forecast, discount rate, or entity alternative. Attach the valuation evidence and reviewer rather than describing the calculator as an impairment test.
Reconcile movement before interpretation
For each class, bridge opening gross amount, additions, disposals, reclassifications, and ending gross amount. Separately bridge accumulated amortization and impairment. Keep business-combination additions and other noncash movements apart from cash purchases.
A net decrease can combine new capitalization with larger amortization or impairment. It is not automatically disinvestment. A high goodwill balance is not a direct measure of successful integration, and an impairment is not a cash outflow in the recognition period.
Release control
Release the close only when:
- the class, life, unit, reporting period, adoption status, and entity election are explicit;
- cost, amortization, impairment, and residual schedules tie;
- valuation and scope judgments have named evidence owners;
- cash and noncash additions remain separate; and
- disclosures and open conditions agree with the ledger.
Exit check
Given an unlabeled impairment workbook and a one-line net intangible change, reconstruct the missing class and unit questions, perform only the supplied comparisons, and write a release note that distinguishes verified arithmetic from valuation and accounting judgments still awaiting approval.