Intangible Assets & Goodwill Impairment Testing
Rigorous, audit-ready valuations for intellectual property, intangible assets, and ASC 350 goodwill impairment compliance.
Valuing What Drives Modern Enterprise
Intangible asset valuations are commonly performed for transactional purposes as well as for notational purposes. In transactional analyses, owners / operators rely on the valuation analyst’s advice and opinions to negotiate, structure, and consummate actual commercial transactions.
Notational valuations are the estimation of an intangible asset value for insurance, estate planning, regulatory compliance, corporate strategic planning, or other management information purposes.
The intangible quality of an intangible asset means that the value of the asset does not come from its physical qualities; rather, the value comes from the bundle of legal rights associated with that asset.
Intangible asset such as Intellectual property (IP) is often among the most valuable assets of an organization, encompassing patents, trademarks, trade secrets, copyrights, and rights of publicity. Independent IP valuation is critical across transactions and strategic situations, including M&A, licensing, restructurings, litigation, financing, and transfer pricing.
Our Intangible Asset Valuation Capabilities
We value a broad range of intellectual property and intangible assets that underpin enterprise value and competitive advantage.
Technology & Patents
We value patents, trade secrets, and product technologies such as diagnostic tests, pharmaceutical compounds, medical devices, industrial processes, and advanced technologies spanning semiconductors, telecommunications, and scientific equipment.
Copyrights & Legal Rights
We value copyrights, content libraries, and provide valuation support for contractual and legal rights such as franchise agreements, licensing and royalty arrangements, and non-competition agreements.
Brands & Software
We assess brand-related assets, including product brands, trademarks, and trade names across consumer, publishing, and retail sectors, alongside software assets (patented, unpatented, or copyrighted) reflecting their critical role in modern business models.
Goodwill Impairment Testing (ASC 350)
Under ASC 350, goodwill impairment testing is required at least annually, and more frequently if triggering events arise. The test compares the fair value of a reporting unit to its carrying amount to assess whether goodwill is impaired.
Following the issuance of ASU 2017-04, the impairment model was simplified from a two-step approach to a single-step test. The former Step 2—requiring a hypothetical purchase price allocation—has been eliminated. Impairment is now measured as the excess of carrying amount over fair value, limited to the amount of goodwill.
If the fair value of a reporting unit exceeds its carrying amount, no impairment is recognized. If the carrying amount exceeds fair value, an impairment charge is recorded for the difference, capped at the goodwill balance. Reporting units with zero or negative carrying amounts are no longer subject to qualitative assessment; instead, entities are required to disclose the goodwill allocated to those units.
For tax-deductible goodwill, deferred tax effects must be considered in measuring impairment. Any impairment charge may create or adjust deferred tax balances, requiring a concurrent assessment to avoid circular impacts on the carrying value.
With goodwill balances continuing to grow—reaching trillions across public company balance sheets—the importance of robust and transparent impairment testing remains elevated.
ASC 350 Framework & Support
Regular testing serves not only compliance purposes but also as a critical discipline in evaluating acquisition performance and capital allocation.
We can support clients in performing rigorous, audit-ready goodwill impairment testing under ASC 350, combining robust valuation methodologies, disciplined financial modeling, and thoughtful assessment of market conditions.
We work closely with management, auditors, and boards to establish appropriate testing frameworks, identify triggering events, and deliver clear, defensible conclusions that enhance transparency and confidence in financial reporting.
Let's Discuss Your Valuation & Compliance Needs
We are ready to support your intangible assets valuations and goodwill impairment testing requirements with independence, precision, and deep market expertise.
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