If the fair value of goodwill is less than its carrying value,an impairment loss must be recorded.

Name: If the fair value of goodwill is less than its carrying value,an impairment loss must be recorded.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the fair value of goodwill is less than its carrying value, it indicates that the company's acquisition was not as valuable as initially thought, and therefore an impairment loss must be recognized. This impairment loss is recorded to adjust the carrying value of goodwill to its fair value.

If the Fair Value of Goodwill Is Less Than Its