Goodwill test for impairment

In the bottom up test, allocating goodwill and not allocating goodwill to the revised carrying amounts of CGU’s is considerable. This is because, even though there is no impairment of an asset, goodwill allocation will increase the carrying amount of CGU’s than its recoverable amount leading to an impairment loss when their values are in proximity. Here, Good Will is allocated and not allocated in determining impairment. 

From what I have read ‘If enterprise fails to allocate goodwill to each CGU on a reasonable and consistent basis then compare the recoverable amount of Smallest CGU to the sum of book value of asset and goodwill If it is a loss then compare the same to next Largest CGU and continue the process till the entire company is taken as CGU  to arrive at impairment loss’

Read more at: https://www.caclubindia.com/forum/as-18-impairment-of-assets-284994.asp

From my understanding, top down and bottom up tastings can work out without goodwill allocation. Then, these tests are conducted as part of an impairment review and goodwill remeasurement.

https://www.taxdose.com/illustration-7-application-of-the-bottom-up-and-top-down-tests-to-goodwill-2/