I am confused about impairment under the Equity method. Under section 4.5 para 2 page 28 CFAI text, it says that goodwill is not seperately tested as it is all recorded under the same line. In the last paragraph of page 24 it says how goodwill is calculated is tested and written down for impairments. Any idea? 
I am also confused how goodwill is recorded in the same line of the BS. How is that done? What is it included with, when the purchase price is split among different “net identifiable asset” classes ? thanks
Under Equity Method, Investment is reported as a Single Line Item of Asset. The components of this Asset are: 1. Book Value: It is the proprtionate total of book value of the individual assets/liabilities of the company you purchased. 2. Excess Fair Value of Tangible Assets: Assets of the company whose stocks you have bought would be reported at historical costs in their books. When you purchase stocks in this associate, they will be charging you Fair Value and not the Book Value of those assets. Also, this component helps you later to add excess depreciation expense in your I/S, based on excess fair value you are recognizing. 3. Goodwill: Anything extra you paid over the fair value of net tangible assets becomes the third component of your single line reported figure. This component cannot be amortized as you did for your second component, but it needs to be tested for impairment. Regarding goodwill, in subsequent periods after your purchase, you will calculate a price if you had to purchase the same association again. That will be the fair value of your holdings. Now, if the carrying cost in your single item figure is more than this value, you will reduce your gooodwill component to that extent and recognize a loss in Income Statement. You could continue doing so in subsequent periods, till your goodwill component becomes 0. Hope this helps a bit.
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Maybe Damil has an example question we can play with to better understand?