In its March 14^th meeting, the FASB decided to issue an Exposure Draft proposing a three step goodwill impairment test.  The first step would be a qualitative "more-than-likely" assessment of whether the carrying value of a reporting units is greater than its fair value.  The FASB's proposal is an effort to respond to constituent concerns about the cost of goodwill impairment testing, and the Exposure Draft will ask respondents to address whether the proposal will result in cost savings. 

Currently, entities are required to evaluate goodwill for impairment annually, or more frequently when events or circumstances indicate that goodwill may be impaired.  However, a recent PCAOB report on inspection observations during the economic crisis indicated that the existence of impairment indicators such as the decline in a company's stock price or a reduction in estimates of future revenue did not lead financial statement issuers to conclude that impairment testing had to be performed more often than annually.  The report also concluded that if auditors do not properly test the timing decisions relating to impairment testing, the auditor may fail to detect material financial statement misstatements.

The FASB's Project Update on Goodwill Impairment Assessment is available here.