I was wondering whether goodwill can be reallocate between two different reporting units? I think under GAAP, it is not allowed, but I have no information to back up this, it is purely guessing.

For example, two reporting unit, one of them is purchased from another company. Now the management feels like the one acquired is likely to have a GW impairment, so want to reallocate the GW to reporting unit 1. So would this be allowed under GAAP?

I tried to look in the codification, but couldn't find anything, if anyone can help, I really appreciate it.

Thanks

I don't have access to the codification standards but FAS 142 (Goodwill and Other Intangible Assets) states the following:

34. For the purpose of testing goodwill for impairment,all goodwill acquired in a business combination shall be assigned to one or more reporting units as of the acquisition date. Goodwill shall be assigned
to reporting units of the acquiring entity that are expected to benefit from the synergies of the combination even though other assets or liabilities of the acquired entity may not be assigned to that reporting
unit. The total amount of acquired goodwill may be divided among a number of reporting units. The methodology used to determine the amount of goodwill to assign to a reporting unit shall be reasonable
and supportable and shall be applied in a consistent manner. In addition, that methodology shall be consistent with the objectives of the process of assigning goodwill to reporting units described in paragraph 35.

35. In concept, the amount of goodwill assigned to a reporting unit would be determined in a manner similar to how the amount of goodwill recognized in a business combination is determined. An entity would determine the fair value of the acquired business
(or portion thereof) to be included in a reporting unit—in essence a “purchase price” for that business. The entity would then allocate that purchase price to the individual assets acquired and liabilities assumed
related to that acquired business (or portion thereof).21 Any excess purchase price is the amount of goodwill assigned to that reporting unit. However, if goodwill is to be assigned to a reporting unit that has not been assigned any of the assets acquired or liabilities assumed in that acquisition, the amount of goodwill to be assigned to that unit might be determined by applying a “with and without” computation.
That is, the difference between the fair value of that reporting unit before the acquisition and its fair value after the acquisition represents the amount of goodwill to be assigned to that reporting unit.