FASB is seeking comments on whether it should make changes to the accounting for certain identifiable intangible assets acquired in a business combination and subsequent accounting for goodwill.
In an Invitation to Comment issued Tuesday, FASB said that preliminary outreach to public company stakeholders over the past few years resulted in some feedback indicating that the benefit of certain intangible asset and goodwill impairment information might not justify the cost of preparing and auditing that information. In contrast, private company stakeholders indicated that private company accounting alternatives issued by the Private Company Council have reduced cost and complexity without significantly diminishing the usefulness of the information.
FASB recently extended the private company accounting alternatives to not-for-profit entities and is considering whether to offer public companies those alternatives, which address amortizing goodwill, performing goodwill impairment testing upon a triggering event at an entity level, and subsuming certain items reported as identifiable intangible assets into goodwill. However, providing those alternatives could create global comparability issues. In addition, some users of public company financial statements indicated that they find value in the goodwill and intangible asset information currently reported.
The deadline for comments is Oct. 7, 2019.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.