FASB consults on the amortization of goodwill
Jul 09, 2019
On July 9, 2019, the Financial Accounting Standards Board (FASB) issued an invitation to comment "Identifiable Intangible Assets and Subsequent Accounting for Goodwill", which notes that the FASB has been considering whether to change the subsequent accounting for goodwill for cost-benefit reasons. US GAAP currently requires a goodwill impairment model.
The International Accounting Standards Board (IASB) has also been discussing restoring amortization of goodwill. In December 2017, the Board decided tentatively not to reintroduce amortization and to focus on improving the impairment model instead. It confirmed this decision at its June 2019 meeting. However, the paper was the most heavily debated paper during the session as improving the impairment model has turned out to be very difficult, and the final decision was very close. The Board finally decided by a vote of 8 to 6 to confirm its preliminary view not to reintroduce amortization and to retain an impairment-only model.
The FASB's invitation to comment offers a comprehensive analysis of the subsequent accounting for goodwill as well as a comparison with the IASB approach and the approach of the Japanese standard-setter ASBJ.
Comments on the the FASB's invitation to comment are due by October 7, 2019.
Review the press release, a short explanatory video, and the invitation to comment on the FASB's website.
