Goodwill Impairment Disclosure Requirements Under ASC 350: The Complete Checklist

If your company has recognized a goodwill impairment charge, or if your reporting unit headroom is thin enough to draw scrutiny, the disclosure requirements under ASC 350-20 are more demanding than most teams expect. This guide covers every required disclosure element, the SEC comment letter patterns that signal deficient filings, and the fair value cross-references that auditors and staff reviewers check first.

Key takeaway: ASC 350-20 disclosure requirements split into two tracks: what you must disclose when you recognize an impairment loss, and what you must disclose even when no impairment occurs but headroom is narrow. Both tracks carry real SEC enforcement risk.

What Are the ASC 350-20 Goodwill Impairment Disclosure Requirements?

Under ASC 350-20-50, an entity that recognizes a goodwill impairment loss must disclose the amount of the loss and the method used to determine the fair value of the affected reporting unit. That fair value determination then triggers the full ASC 820-10-50 fair value measurement disclosure set, including the valuation technique, significant unobservable inputs, and the level in the fair value hierarchy.

But the codification requires more than a single line item. The complete disclosure package for a recognized impairment includes:

• The amount of the impairment loss recognized, by reporting unit if material
• The method used to determine the fair value of the reporting unit (discounted cash flow, market approach, or a combination)
• The significant assumptions used, including discount rates, revenue growth rates, and terminal value assumptions
• The segment in which the impaired reporting unit resides, cross-referenced to ASC 280 segment disclosures
• The cumulative amount of goodwill impairment losses recognized to date, presented in the rollforward of goodwill
• The ASC 820 fair value hierarchy level and, for Level 3 measurements, the quantitative information about unobservable inputs

The goodwill rollforward itself, required by ASC 350-20-50-1, must show the gross carrying amount and accumulated impairment losses separately at the beginning and end of the period. That gross-versus-net presentation is a common deficiency in SEC comment letters.

What Must You Disclose When No Impairment Is Recognized?

The absence of an impairment charge does not eliminate disclosure obligations. ASC 350-20-50 requires disclosure of the reporting units for which the qualitative assessment was performed and the basis for that conclusion. More practically, the SEC staff has consistently pushed companies to disclose more when a reporting unit's fair value does not substantially exceed its carrying amount.

For reporting units where the quantitative test was performed and the margin of safety is thin, best practice, and increasingly SEC staff expectation, includes:

• The percentage by which fair value exceeded carrying value at the most recent test date
• A description of the key assumptions and how they were determined
• The degree of uncertainty associated with those assumptions
• A description of potential events or changes in circumstances that could reasonably be expected to result in a future impairment charge

This is not purely voluntary. Item 303(b)(3) of Regulation S-K requires MD&A to discuss known trends and uncertainties that are reasonably likely to have a material effect on financial condition. A reporting unit sitting at 5% headroom qualifies. The SEC's Financial Reporting Codification Section 501.14 and Release No. 34-48960 both address this directly.

The ASC 820 Cross-Reference: Fair Value Disclosures You Cannot Skip

When a goodwill impairment test produces a recognized loss, ASC 350-20-50-3(b) requires the fair value measurement disclosures under ASC 820-10-50. In practice, this means the impairment note cannot simply state the loss amount. It must explain how fair value was measured.

For a typical discounted cash flow analysis, that means disclosing:

• The valuation technique (income approach, market approach, or blended)
• The significant unobservable inputs (discount rate, long-term growth rate, projected EBITDA margins)
• The sensitivity of the conclusion to changes in those inputs

For a market approach using guideline public companies or transaction multiples, the disclosure should identify the methodology and, where material, the comparable set. Auditors and SEC reviewers treat vague references to "a combination of income and market approaches" as a red flag, not a safe harbor.

Our ASC 820 fair value disclosure requirements guide covers the full Level 3 roll-forward and quantitative input disclosure rules that apply once a goodwill impairment triggers the ASC 820 cross-reference.

MD&A Obligations: Critical Accounting Estimates

The goodwill impairment test is almost always a critical accounting estimate under Item 303 of Regulation S-K, and the MD&A section must treat it as one. That means going beyond the accounting policy note to explain the specific assumptions that drive the conclusion, the sensitivity of the test to changes in those assumptions, and the circumstances that would trigger a future charge.

The SEC staff has been explicit about what it expects. A comment letter pattern documented by Deloitte's DART shows the staff asking companies to:

• Explain how market capitalization was considered in determining reporting unit fair values
• Provide reporting-unit-specific facts and circumstances when a charge is recognized, not just company-wide macroeconomic commentary
• Quantify the impact of assumption changes (for example, what a 100-basis-point increase in the discount rate would do to the impairment conclusion)
• Address interim period indicators when the 10-K qualitative assessment is followed by a deteriorating 10-Q environment

The last point is a common trap. A company that passes its annual qualitative assessment in October and then reports declining volumes and margin compression in Q2 of the following year needs to explain in the 10-Q why no triggering event analysis was required, or disclose the results of one. Our ASC 350 Q2 2026 triggering events guide covers the interim disclosure obligations in detail.

ASC 350-20 Disclosure Checklist: Annual and Interim

Use this checklist for each reporting period. Items marked (A) apply annually; items marked (A/I) apply at both annual and interim periods if a triggering event or impairment occurs.

Goodwill rollforward (A)

• Gross carrying amount, beginning of period
• Accumulated impairment losses, beginning of period
• Changes during the period (acquisitions, disposals, impairments, foreign currency)
• Gross carrying amount, end of period
• Accumulated impairment losses, end of period
• Presentation by reportable segment if the entity has multiple segments

Impairment loss recognized (A/I)

• Amount of impairment loss, by reporting unit if material
• Reporting segment in which the impaired unit resides
• Method used to determine fair value of the reporting unit
• Significant assumptions and inputs (discount rate, growth rates, margins)
• ASC 820 fair value hierarchy level and quantitative input disclosures
• Cumulative impairment losses recognized to date

Qualitative assessment performed (A)

• Statement that a qualitative assessment was performed
• Conclusion that it is not more likely than not that fair value is less than carrying amount
• No further quantitative disclosure required if conclusion is affirmative

Thin-headroom reporting units (A/I, SEC-driven)

• Percentage by which fair value exceeds carrying value
• Description of key assumptions and determination methodology
• Sensitivity analysis: impact of adverse changes in key assumptions
• Description of events or circumstances that could result in future impairment

MD&A critical accounting estimate (A)

• Description of the impairment test methodology
• Identification of reporting units with limited headroom
• Quantified sensitivity to key assumption changes
• Discussion of trends or uncertainties that could affect future conclusions

How the Qualitative vs. Quantitative Test Affects Disclosure

The test structure under ASC 350-20-35 directly determines the disclosure depth required.

One practical note: electing the qualitative assessment does not reduce disclosure risk when conditions deteriorate between the annual test date and the filing date. If facts and circumstances change materially before the 10-K is filed, the entity needs to consider whether a subsequent-events analysis affects the disclosure.

SEC Comment Letter Patterns to Anticipate

The SEC staff's comment letters on goodwill impairment are among the most detailed in financial reporting. Based on published comment letter examples, the staff focuses on four recurring deficiencies:

1. Boilerplate sensitivity disclosures. Stating that "a 1% increase in the discount rate would result in an additional impairment" without also disclosing the impact of revenue growth or margin assumption changes is insufficient. The staff expects a complete picture of the key drivers.

2. Mismatch between qualitative conclusion and subsequent deterioration. When a company passes its qualitative test in Q4 and then reports significant headwinds in Q1 or Q2, the staff asks why no triggering event was identified. The answer needs to be in the filing, not in a response letter.

3. Insufficient reporting-unit specificity. When an impairment charge is recognized, the staff expects the disclosure to explain the specific facts and circumstances for that reporting unit, not a general reference to macroeconomic conditions. If the unit's fair value substantially exceeded carrying value one year earlier, the disclosure must explain what changed.

4. Gross-versus-net goodwill presentation. The rollforward must show gross carrying amounts and accumulated impairment losses separately. Presenting only net goodwill is a codification violation that the staff catches consistently.

For the full picture of how these comment patterns interact with your MD&A, see our goodwill impairment disclosure requirements 2026 guide, which covers the IASB's parallel IAS 36 requirements and the cross-border disclosure differences.

FAQ

What paragraph of ASC 350 governs goodwill impairment disclosures? ASC 350-20-50 contains the primary disclosure requirements. ASC 350-20-50-1 covers the goodwill rollforward; ASC 350-20-50-3 covers disclosures when an impairment loss is recognized, including the cross-reference to ASC 820-10-50 for fair value measurement disclosures.

Does ASC 350 require disclosure of the fair value of each reporting unit? Not in all cases. When an impairment loss is recognized, the fair value of the impaired reporting unit must be disclosed along with the valuation method and significant assumptions. For units where no impairment is recognized, fair value disclosure is not explicitly required by ASC 350-20-50, but the SEC staff expects sensitivity disclosures for units with thin headroom.

What is the goodwill rollforward and when is it required? ASC 350-20-50-1 requires a rollforward of the aggregate goodwill balance showing gross carrying amounts and accumulated impairment losses at the beginning and end of the period, with changes during the period. It is required every annual period and must be disaggregated by reportable segment if the entity operates in multiple segments.

When does a triggering event require interim goodwill impairment disclosures? Under ASC 350-20-35-3C, an entity must evaluate whether a triggering event has occurred between annual tests whenever facts and circumstances indicate that the fair value of a reporting unit is more likely than not below its carrying amount. If a triggering event exists and an impairment test is performed, the full disclosure requirements of ASC 350-20-50-3 apply in the interim period filing.

How do ASC 350 and ASC 820 interact for goodwill impairment disclosures? ASC 350-20-50-3(b) explicitly requires the fair value measurement disclosures under ASC 820-10-50 whenever an impairment loss is recognized. This means the impairment note must include the valuation technique, the fair value hierarchy level, and, for Level 3 measurements, quantitative information about significant unobservable inputs such as discount rates and long-term growth rates.

Are private companies subject to the same ASC 350-20 disclosure requirements? Private companies that elect the PCC accounting alternative under ASC 350-20-35-62 through 35-82 can amortize goodwill on a straight-line basis over 10 years (or less). They also have the option under ASU 2021-03 to evaluate triggering events as of the end of the reporting period rather than throughout the period. The disclosure requirements for recognized impairment losses are substantively the same, but the triggering event evaluation timing differs from the public company model.