U.S. public companies reported $51 billion in goodwill impairments in 2012, nearly double the $29 billion reported in 2011, with more than half of the 2012 total concentrated in three industries.

Goodwill arises on corporate balance sheets as a result of business combinations, representing the amount that exceeds the fair value of the individual assets and liabilities absorbed in a merger or acquisition. Companies are required to assess goodwill and mark it down when the carrying value on the books exceeds current fair value. Some regard aging goodwill as an indicator that the price paid for a deal was worth it, while a write-down suggests the company paid too much, such as when HP took an impairment charge of $8 billion related to its acquisition of Autonomy.

Companies in information technology, health care, and industrial sectors accounted for 67 percent of the total goodwill write-downs reported in 2012, according to financial advisory firm Duff & Phelps and the Financial Executives Research Foundation, who performed the study. The 2012 data is based on information reported by more than 5,100 companies representing 93 percent of market capitalization for all public companies, said Duff & Phelps. The $51 billion impairment total represents the highest level reported since the financial crisis of 2008, the first year Duff & Phelps studied goodwill impairment reporting.

The study also showed that 43 percent of all U.S. public companies carry some amount of goodwill on their balance sheets, down by nearly half from the percentage of companies that carried goodwill in 2010. Of companies that carried goodwill in 2012, 10.5 percent recorded an impairment, virtually flat from 10.2 percent in 2011. In a survey accompanying the study data, nearly 60 percent of public and private companies who were polled said their specific impairments resulted from factors specific to their business and not overall market or industry downturns.

The purpose of the study is to give companies an opportunity to benchmark where their goodwill levels and impairments stand with respect to other companies and other sectors, said Greg Franceschi, managing director at Duff & Phelps, in a statement. The survey also was meant to gauge the extent to which companies are using a qualitative test as a preliminary step to a full quantitative analysis of whether goodwill is impaired as permitted under accounting standards. Despite expectations that companies would gravitate to the qualitative test as a simplification over the more detailed fair value exercise, the survey found more than 70 percent of companies opted to skip the preliminary qualitative test and proceeded directly to the quantitative test.

The American Institute of Certified Public Accountants recently published guidance meant to help companies navigate a range of goodwill impairment issues, including using the qualitative test to determine if goodwill should be written down. “This guidance is very new,” says Yelena Mishkevich, senior technical manager at the AICPA. “When we released our original guide, we asked if additional implementation guidance was needed on this. Overwhelmingly, people said yes, they wanted this guidance.”