Can events that trigger a diminution in the value of goodwill be identified?
Events that cause a decrease in goodwill can occur over a period of time, as the result of a series of events, or be the result of a specific event. The decease in goodwill can be temporary or permanent. The public capital markets and management continuously make judgments about the future prospects of a company. If those prospects have deteriorated, the markets reflect that decrease in the company’s valuation. The events that cause goodwill to deteriorate can be market based or based on an ineptness of management to implement and execute a solid strategy. The determination of whether acquired goodwill has been permanently impaired is difficult and requires judgment. There are also issues related to the level at which anticipated cash flows should be measured, and, if that measurement at a detailed level is even possible subsequent to the integration of an acquired enterprise. If it can be determined that the value of goodwill asset has been impaired, how should the impairment of goodw
