Does having a negative book value impact the impairment test for goodwill?
Negative book value
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Does having a negative book value impact the impairment test for goodwill?
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Having a negative book value is an indicator of impairment, but does not directly impact the goodwill impairment test calculation. With the issuance of ASU 2017-04, there are no longer any special considerations for reporting units that have negative book value and the test is the same for all reporting units regardless of book value. In this case, there will likely be no impairment as the fair value is most likely higher than zero.