The FASB seeks comments

Report Addresses Business Combinations

T he Financial Accounting Standards Board took an early step in its project to address business combinations (see “FASB to Address Pooling of Interests,” JofA, July97) with the publication of Issues Associated with the FASB Project on Business Combinations . The board is seeking comments on this special report.

“The goal of the report is to inform CPAs about the complex issues,” L. Todd Johnson, FASB senior project manager, told the Journal . Johnson wrote the report with FASB Practice Fellow Bryan D. Yokley. “Many may not be aware of why this project is on the FASBs agenda or what some of the implications of any change might be. Portions of the report bring up questions the board is looking at.” Johnson said the report provides a broad overview of the issues concerning the projects scope, direction and conduct and is designed to be an “easy read”—not technical. A key issue, according to Johnson, is how to account for goodwill. “These standards vary all over the world,” he said. In general, the FASB hopes to promote international comparability of standards.

The business combination project, which has been on the FASBs agenda since August 1996, may lead to one or more statements that would modify or supersede Accounting Principles Board Opinions no. 16, Business Combinations , and no. 17, Intangible Assets, which were issued in 1970.

Copies of the report are available from the FASB order department, 203-847-0700, ext. 555. Comments are due by September 1.