Goodwill is written down to its fair value if the fair value is less than its carrying value.

Question

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If the fair value of goodwill is less than its carrying value, it represents an impairment loss and must be written down to its fair value. This is because GAAP (Generally Accepted Accounting Principles) requires companies to report their assets at their fair value, which is the amount they would receive if they sold the asset on the open market.

Goodwill Is Written Down to Its Fair Value If the Fair