Are goodwill impairment analyses during intense market conditions useful?

BVWireIssue #97-4
October 27, 2010

Mark Donahue (Duff & Phelps) wrote in a recent issue of Value Examiner that “in periods of extreme market conditions, the usefulness of goodwill impairment analyses and their conclusions are questionable at best.” Donahue addresses the general application of ASC 350 and ASC 820 in the context of stockprice swings between late 2008 and late 2009—a period “that ostensibly indicated significantly different values for many companies (depending upon the date of measurement) despite the fact that many of those companies’ fundamental risks and prospects did not substantially change.” As a result, Donahue advises practitioners to beware of goodwill impairment analyses during such times.

To access the article on the Duff & Phelps website click here.

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