Both accounting standards treat goodwill as an intangible asset. However, goodwill is never amortized in either system, but must be regularly tested for impairment. According to GAAP, “an impairment loss is the amount by which the carrying amount of goodwill exceeds its implied fair value in the reporting unit” (L, 2012). Whereas IFRS adopts a one-step approach that compares the carrying amount of goodwill to its recoverable amount. When the carrying amount of goodwill is greater than its recoverable amount, an impairment loss is recognized. Therefore, although the continuing accounting policies for goodwill are similar under GAAP and IFRS, the difference in how impairments are defined and recognized will result in different amounts being recognized on the balance sheet..