What is the frequency of goodwill testing for impairment?

Goodwill testing for impairment is required to be conducted annually, as well as whenever there are indicators suggesting that the carrying value of goodwill may not be recoverable. This annual requirement ensures that companies assess the fair value of goodwill to avoid overstating the financial position of the organization.

In addition to the annual assessment, companies must also consider other events or circumstances that might indicate a potential impairment. This could include significant business changes, negative economic trends, or declines in market capitalization, prompting an interim test. Therefore, the timing of impairment testing is both systematic and responsive to changes in the business environment, making the answer that entails annual testing with the provision for additional assessments the most accurate representation of the current standards and practices in accounting for goodwill.