Moreover, the choices companies make regarding reporting units affect whether they will likely have a future impairment loss. Why? If the fair value for any particular reporting unit is found to be below its book value, a loss would be recorded regardless of another reporting unit's rising fair value.
"You can't net one [reporting unit] against another," says Willens. "If you have a surplus, canceling each other out is not an option. Maybe the idea is to cut down on the number of reporting units so you can minimize that outcome."
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