Intangible Asset Valuation

Impairment Testing

valuation_impairment

Read-onlyIdempotent

Test goodwill or intangible asset impairment under ASC 350 or IAS 36 by comparing carrying value with fair value or recoverable amount.

Instructions

Impairment testing: goodwill impairment and intangible impairment under US GAAP (ASC 350) or IFRS (IAS 36). Method selects the formula. Use for annual or triggering-event impairment testing; goodwill_impairment compares a reporting unit's carrying value with its fair value. To compute the initial goodwill or allocation use valuation_goodwill_ppa; for the underlying asset fair values use the relevant asset-type tool. Per method: goodwill_impairment needs carrying_value + fair_value (optional: reporting_unit, standard); intangible_impairment needs carrying_value (optional: fair_value, recoverable_amount, standard). fair_value is required for ASC350; recoverable_amount is required for IAS36. Only method is required; other parameters are method-dependent, so supply those named for the selected method and omit the rest (documented defaults apply where defined). Pure arithmetic: no I/O and no external calls, and numeric results are returned rounded to 2 decimals. Parameters belonging to other methods of this tool are accepted and ignored. Supplying an unknown method, or leaving unset a parameter that the chosen method requires, returns an error instead of a value.

Input Schema

TableJSON Schema

Name	Required	Description
`method`	Yes	Formula to apply. Options: goodwill_impairment = Impairment = carrying value - fair value (if positive).; intangible_impairment = Impairment of an intangible under ASC 350 or IAS 36.
`standard`	No	Accounting standard: ASC350 for US GAAP, IAS36 for IFRS.
`fair_value`	No	Fair value of the reporting unit or asset, in currency units.
`carrying_value`	No	Carrying value of the reporting unit or asset, in currency units.
`reporting_unit`	No	Reporting unit name (goodwill only).
`recoverable_amount`	No	Recoverable amount (IAS 36), in currency units.

Output Schema

TableJSON Schema

Name	Required	Description
`error`	No	Error message when the call fails.
`steps`	No	Intermediate calculation steps for traceability (one string per step).
`value`	Yes	Computed valuation, rate, or metric.
`method`	No	Formula / method name that produced the result.
`assumptions`	No	Modelling assumptions applied (list of strings or key/value object).
`formula_reference`	No	Mathematical formula or reference applied.

Schema Changelog

Changes observed during successful MCP inspections.

Changed2 schema fields changedv0.1.4Sep 30, 2026

changedOutput schema / properties / steps / description

Previous value: -"Intermediate calculation steps for traceability."New value: +"Intermediate calculation steps for traceability (one string per step)."

removedOutput schema / properties / steps / items / type
```
Removed value: -"object"
```

First observedv0.1.0Sep 30, 2026

TDQS

A4.8/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnly, idempotent, non-destructive, closed-world, but the description adds substantial context beyond them: pure arithmetic with no I/O or external calls, results rounded to 2 decimals, foreign-method parameters accepted and ignored, and specific error conditions (unknown method, missing required parameter).

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Dense but front-loaded: purpose and method selection come first, then per-method parameter requirements, then behavioral notes. Nearly every sentence earns its place, though the length is borderline for a single-purpose calculator.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given an output schema exists, return values need not be explained, yet the description still notes 2-decimal rounding. Combined with method-dependent parameter rules and error behavior, an agent has everything needed to invoke it correctly.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so per-field types are already documented, but the description adds cross-parameter dependency logic the schema cannot express: which parameters each method requires, that fair_value is required for ASC350 and recoverable_amount for IAS36, and that only method is mandatory. This meaningfully exceeds the schema.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

States a specific verb and resource (impairment testing of goodwill and intangibles) and immediately scopes it to US GAAP ASC 350 / IFRS IAS 36. It also differentiates from siblings by naming valuation_goodwill_ppa for initial goodwill and pointing to asset-type tools for underlying fair values.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicitly says when to use it (annual or triggering-event impairment testing), which method to pick for which case, and names the alternatives (valuation_goodwill_ppa, relevant asset-type tool) with the condition that selects each. Routing is unambiguous.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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