United States

Qualitative impairment assessment of indefinite-lived intangible assets

WHITE PAPER

RSM US LLP's National Accounting Standards Group has prepared Qualitative impairment assessment of indefinite-lived intangible assets to provide insights regarding FASB Accounting Standards Update (ASU) 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU gives an entity the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. Under prior guidance, an entity was required to test an indefinite-lived intangible asset for impairment on at least an annual basis by comparing the fair value of the asset with its carrying amount.

RSM's analysis provides information regarding factors that should be considered in conducting a qualitative assessment to the extent they could affect significant inputs used to estimate the fair value of the indefinite-lived intangible asset being tested for impairment. Our analysis also discusses interim impairment testing and important adoption considerations.

The amendments in ASU 2012-02 are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.