BAR, Business Analysis and Reporting

Sources for Indefinite-Lived Intangibles and Goodwill

Last reviewed 2026-10-06

The standards and authorities behind PocketCPA's BAR lessons on Indefinite-Lived Intangibles and Goodwill. The topic rests on ASC 350.

About this topic

Goodwill is the amount a buyer paid for a business over and above the fair value of the identifiable assets and liabilities it acquired. It is never amortized. It is tested for impairment instead, and that test runs at the level of a reporting unit, which is an operating segment or one level below it.

Nothing beyond those five is presumed.

Key points

Goodwill impairment is tested at the reporting-unit level by comparing fair value to carrying amount.
The qualitative assessment (Step 0) determines whether it is more likely than not that fair value is less than carrying amount.
An indefinite-lived intangible is impaired when its fair value falls below its carrying amount.
No goodwill impairment loss can exceed the goodwill allocated to the reporting unit.

What the lessons cover

Indefinite-lived intangibles are tested, not amortized
Goodwill: reporting-unit level, one-step test
Sequencing and the qualitative screen
Private-company alternative
Determining reporting units, and why the count moves the loss (ASC 350-20-35-33 through 35-38)
Measuring the reporting unit's fair value (ASC 350-20-35-22 through 35-27)
Assigning goodwill at acquisition, and the first test after a deal (ASC 350-20-35-39 through 35-44)
Disposing of a reporting unit, or part of one (ASC 350-20-40-1 through 40-7)
The private-company intangibles election feeds the goodwill balance (ASC 805-20-25-29 through 25-33)
Presentation, the rollforward, and what a reader can see (ASC 350-20-45-3; 350-20-50-1)
What the write-down does to the statements and the ratios

Authoritative references

Testing and measuring goodwill:

ASC 350-20-35, impairment as the shortfall of fair value against carrying amount, capped at the goodwill assigned to the unit.
ASC 350-20-35-1, 35-28 and 35-30, when goodwill is tested: at least annually at the same time each year, and on triggering events.
ASC 350-20-35-2, 35-6 and 35-7, the one-step comparison under ASU 2017-04, with no loss where fair value exceeds carrying amount and the deferred-tax rule for the carrying amount.
ASC 350-20-35-3, the optional qualitative Step 0.
ASC 350-20-35-8B, the simultaneous equation for tax-deductible goodwill, with the zero-or-negative carrying amount case disclosed under ASC 350-20-50-1A.
ASC 350-20-35-12 and 35-13, the reduced amount as the new accounting basis, with reversal prohibited.
ASC 350-20-35-22 through 35-27, measuring the reporting unit's fair value, including the taxable or nontaxable transaction assumption settled before estimating fair value, and the feasibility factors at 35-26 and 35-27.
ASC 350-20-35-31 and 35-32, the sequencing rule: other assets are tested first, including all assets tested for impairment and not only long-lived assets.
ASC 350-20-35-33 through 35-38 and 55-1 through 55-9, determining reporting units, and the implementation guidance.
ASC 350-20-35-39 through 35-44, assigning goodwill at acquisition to the reporting units expected to benefit from synergies, and the first test after a deal.
ASC 350-20-40-1 through 40-7, disposing of a reporting unit or part of one, including the goodwill included in the carrying amount of the business disposed of, the retained portion, and the standalone exception.

Private company and not-for-profit alternatives:

ASC 350-20-15-4, 35-63 through 35-67 and 35-70, the population that may elect the Private Company Council alternative, the amortization period capped at ten years, the entity-level or reporting-unit-level policy election, and testing only on a triggering event.
ASC 350-20-35-73 through 35-80 and 35-85, the measurement capped at goodwill, allocation of the loss, the new basis, the sequencing rule, and the triggering-event evaluation.
ASC 805-20-15-2, 25-2 and 25-29 through 25-33, the separate private-company election not to recognize certain customer-related and noncompete intangibles separately from goodwill.
ASU 2019-06, the election restored for not-for-profit entities.

Presentation and disclosure:

ASC 350-20-45-3, 45-5, 50-1, 50-5, 50-6 and 50-7, presentation of goodwill with no accumulated amortization contra account, the rollforward, the gross amounts and accumulated impairment, the method of allocating an impairment to amortizable units, and the carve-out from the Level 3 quantitative disclosures of ASC 820-10-50-2(bbb).

Other intangibles and long-lived assets:

ASC 350-30-35-15 and 35-18A, the impairment test in place of amortization for an indefinite-lived intangible, and the optional qualitative screen.
ASC 360-10-35-17, the two-step test for a finite-lived asset.
Related Topics: ASC 205-20 for discontinued operations, ASC 350-60 for crypto assets, and ASC 820 for fair value.

How PocketCPA uses these sources

Every lesson is written in original words and cites the paragraph each rule comes from. No standard's text is reproduced. How lessons and questions are written and checked is set out in our methodology.