The loss in an entity’s goodwill that occurs when the carrying value of the net assets of the entity or a cash-generating unit (CGU), with goodwill, becomes larger than the recoverable amount of these assets or the unit. This will result in a reduction in the carrying value of goodwill by the amount of impairment loss, but not below its recoverable amount. In addition, and for the remaining impairment loss, the carrying value of other assets will be reduced on a pro-rata basis, but not below their recoverable amounts.

Calculation of goodwill and its impairment loss may differ from an accounting framework to another, particularly in measuring the fair value of goodwill and allocating it to assets and liabilities.