In determining whether goodwill should be tested for impairment, companies and their management consider qualitative factors second, after performing a quantitative test for impairment.

Question

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Companies often first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If based on this qualitative assessment it is determined that it is not more likely than not that the fair value is less than the carrying amount, then a quantitative impairment test is not necessary.

In Determining Whether Goodwill Should Be Tested for Impairment, Companies