In testing goodwill for possible impairment, the goodwill's book value is compared with the goodwill's implied fair value-but only if the reporting unit's carrying value exceeds the reporting unit's estimated fair value.

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In testing goodwill for impairment, the first step is to compare the carrying amount of the reporting unit to its fair value. If the carrying amount exceeds the fair value, then a second step is performed to measure the amount of impairment loss, if any. This involves comparing the carrying amount of the goodwill to its implied fair value, not directly to the goodwill's book value.

In Testing Goodwill for Possible Impairment, the Goodwill's Book Value