How do you model goodwill impairment in an M&A DCF: should you explicitly model it?

Usually you do not explicitly model goodwill impairment in a valuation DCF because it is non-cash and does not affect unlevered free cash flow. Instead, the DCF itself should capture lower future cash flows or higher risk if the acquisition underperforms. In EPS models, you may show impairment as a scenario or one-time accounting charge, but not as core operating performance.