If the market value of a company is below book value and a significant amount of goodwill exists,the presumption is that there has been an impairment of goodwill.

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If the market value of a company is below book value and a significant amount of goodwill exists, it indicates that the assets recorded on the balance sheet may not be worth their recorded value. This could result in an impairment of goodwill, which is recognized when the fair value of the reporting unit (which includes goodwill) is less than its carrying amount. Therefore, the presumption is that there has been an impairment of goodwill.

If the Market Value of a Company Is Below Book