Accounting for Goodwill Policy

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Best Practices for Defining Goodwill Accounting Procedures

The primary goal of this policy is to help document a company’s process and procedures for accounting for goodwill under SFAS 142, “Goodwill and Other Intangible Assets” to verify that goodwill is periodically reviewed for impairment and is properly valued and reported. SFAS 142 applies to goodwill only subsequent to acquisition as determined in accordance with SFAS 141 or SFAS 141(R).

The objective of this policy is to guide the process for accounting for goodwill subsequent to acquisition. The accounting for goodwill includes: identifying reporting unit(s) and allocating goodwill to reporting units; measurement, recognition and recording of impairment losses; and required footnote disclosures.

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