Microsoft Case Study. What will you do with a Goodwill Impairment on the Statement of Cash Flows Add back the Goodwill Impairment. Subtract the Goodwill Impairment. No adjustment needs to be made. When Goodwill is impaired, on the Income Statement it is subtracted out so this needs to be added back to Net Income. If Goodwill is impaired by 100, what will be the net change in cash (Assuming a 40% Tax Rate) Increase Cash by 100. Decrease Cash by 100. No Impact on Cash. Decrease Cash by 60. Increase Cash by 40. Plz help.
Beginning Retained Earnings (as shown on the trial balance) Add Net Income (or Deduct Net Loss) Deduct Dividends. Equals Ending Retained Earnings (reported on the balance sheet)