Definicja impairment test

Method for treating goodwill in the consolidation of investments.

The impairment test is based on the assumption that goodwill has an indefinite or undeterminable useful life and can, therefore, not be amortized on an ordinary basis.

Instead, goodwill undergoes an annual impairment test, in which the fair value of the goodwill of a consolidation unit is calculated and compared to its book value. If the fair value is less than the book value, the goodwill is written down to the fair value.