Friday, January 30, 2009

Got Goodwill? Part 8: Symantec has $7 Billion Impairment Virus

Security software maker Symantec Corp. took a $7 billion goodwill impairment charge in its December 2008 third quarter results. Symantec kept $5-billlion of goodwill on its books. About $8-billion of their goodwill before the write-down came from their acquisition of Veritas for $13.5-billion in 2004.

They completed an interim impairment analysis, meaning that they checked for impairment before being required to do so by their internal policy on testing impairment.

Symantec stated” The GAAP net loss for the third quarter of fiscal year 2009 includes a non-cash goodwill impairment charge of approximately $7 billion. Based on a combination of factors, including the current economic environment and a decline in our market capitalization, we concluded that there were sufficient indicators to require us to perform an interim goodwill impairment analysis. We have not completed the goodwill impairment analysis and expect to finalize it during the fourth quarter of fiscal year 2009. We may make an adjustment to this charge when the goodwill impairment analysis is completed.”

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