Reporting Unit

Definition

The level at which goodwill is tested for impairment under US GAAP (ASC 350), defined as an operating segment or one level below an operating segment (a component). A component is a reporting unit if it constitutes a business for which discrete financial information is available and segment management regularly reviews its operating results. The identification of reporting units directly affects the outcome of goodwill impairment tests because goodwill must be allocated to reporting units and tested at that level.