Impairment Studies for Businesses
Formal assessment of whether carrying value exceeds recoverable amount under applicable accounting standards.
Overview
A formal assessment to determine whether the carrying value of a business or reporting unit exceeds its recoverable amount under applicable accounting standards. We conduct impairment testing with rigorous financial modeling and market analysis. We help clients meet their financial reporting obligations and provide auditors and regulators with reliable, compliant studies.
Our Approach
We determine recoverable amount as the higher of value in use and fair value less costs of disposal, applying the cash-generating unit structure appropriate to the business. Forecasts are tested for realism against historical delivery and market conditions, and discount rates are built up from observable market evidence. Because impairment conclusions are sensitive to a small number of inputs, we present the headroom and the assumptions that would change the outcome.
Common Triggers
Testing is required annually for goodwill, and on indication of impairment such as:
What You Receive
An impairment report supporting the accounting position, with the cash-generating unit rationale, the model, key assumptions, and sensitivity disclosures your auditors and regulators will expect to see.
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