# ASC 350-20-40: Intangibles—Goodwill and Other — Goodwill — 40 Derecognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/350/20/#40-derecognition) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:d4ad681847b9dff5beb34070cd2a9ff3d0360ac76e74358efe64ba0773e0e08c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 350-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/350/20/#40-derecognition) SEC content: no #### Disposal of All or a Portion of a Reporting Unit ##### [350-20-40-1](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:939c706a8a91635b0441c60f487b809f0a296076a2f77c6b9450d924b05d6ea8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a reporting unit is to be disposed of in its entirety, goodwill of that reporting unit shall be included in the carrying amount of the reporting unit in determining the gain or loss on disposal. ##### [350-20-40-2](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:f11f5c2fef2080122f5f4eee679515820771cde60873ef13ac7c6170165cfd10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a portion of a reporting unit that constitutes a business (see Section 805-10-55) or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.")is to be disposed of, goodwill associated with that business or nonprofit activity shall be included in the carrying amount of the business or nonprofit activity in determining the gain or loss on disposal. ##### [350-20-40-3](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:465305fd35513e01a02cde048c0d93490332dc86610e89b09df1d7789d9d9994 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of goodwill to be included in that carrying amount shall be based on the relative fair values of the business or nonprofit activity to be disposed of and the portion of the reporting unit that will be retained. For example, if a reporting unit with a fair value of $400 is selling a business or nonprofit activity for $100 and the fair value of the reporting unit excluding the business or nonprofit activity being sold is $300, 25 percent of the goodwill residing in the reporting unit would be included in the carrying amount of the business or nonprofit activity to be sold. ##### [350-20-40-4](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:6d4259aeea52ba721a91157d19169aa4010921c02d9de1e36f36a00d11e0be51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, if the business or nonprofit activity to be disposed of was never integrated into the reporting unit after its acquisition and thus the benefits of the acquired goodwill were never realized by the rest of the reporting unit, the current carrying amount of that acquired goodwill shall be included in the carrying amount of the business or nonprofit activity to be disposed of. ##### [350-20-40-5](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:073ff5d28997bb2756a86980b01900009a27165a3eabde27e5f5c524b8c0c4c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. That situation might occur when the acquired business or nonprofit activity is operated as a standalone entity or when the business or nonprofit activity is to be disposed of shortly after it is acquired. ##### [350-20-40-6](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:05766c6ae5286d019d6f061a3efe701bc71a240d610fc5ccab585af7be25a4f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Situations in which the acquired business or nonprofit activity is operated as a standalone entity are expected to be infrequent because some amount of integration generally occurs after an acquisition. ##### [350-20-40-7](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:93dacb57e129c1a59d614d49f61dbe7a37888328be48d1b012b05d02e084457b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When only a portion of goodwill is allocated to a business or nonprofit activity to be disposed of, the goodwill remaining in the portion of the reporting unit to be retained shall be tested for impairment in accordance with paragraphs [350-20-35-3A through 35-13](https://asc.understandingaccounting.org/asc/350/20/#350-20-35-3A) using its adjusted carrying amount. ### Accounting Alternatives ##### [350-20-40-8](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:d0840a4b6301c755e6148857d8a30460f034db8992f5dec3aaf77e82a4b65228 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance for [goodwill](https://asc.understandingaccounting.org/glossary/g/#goodwill "An asset representing the future economic benefits arising from other assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are not individually identified and separately recognized. For ease of reference, this term also includes the immediate charge recognized by not-for-profit entities in accordance with paragraph 958-805-25-29.") applies to entities within the scope of paragraph [350-20-15-4](https://asc.understandingaccounting.org/asc/350/20/#350-20-15-4) that elect the accounting alternative for amortizing goodwill. #### Disposal of a Portion of an Entity (or a Reporting Unit) ##### [350-20-40-9](https://asc.understandingaccounting.org/asc/350/20/#350-20-40-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:00:57.352Z to 2026-09-10T00:00:57.352Z Record version: sha256:bdece50677911f9edc472b78178051692ef25ed838ec93eb107f476580fd99c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a portion of an entity (or a [reporting unit](https://asc.understandingaccounting.org/glossary/r/#reporting-unit "The level of reporting at which goodwill is tested for impairment. A reporting unit is an operating segment or one level below an operating segment (also known as a component).")) that constitutes a business or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.") is to be disposed of, goodwill associated with that business or nonprofit activity shall be included in the carrying amount of the business or nonprofit activity in determining the gain or loss on disposal. An entity shall use a reasonable and rational approach to determine the amount of goodwill associated with the business or nonprofit activity to be disposed of.