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Under Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, companies are required to perform an impairment test on existing goodwill as well as identifiable intangibles. If the fair value of a business unit is less than the carrying amount of the assets in that business unit, impairment exists.
Annually, companies are required to conduct an impairment test of goodwill and evaluate remaining useful lives of intangibles. Amortized intangibles are tested against undiscounted cash flows. Indefinite-lived intangibles are tested against fair value. Valuation Research provides services in support of SFAS 142 compliance, including valuations of the underlying assets associated with reporting units.
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