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FASB discusses subsequent measurement of goodwill

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Feb 14, 2014

At its February 12, 2014, meeting, the FASB discussed four potential alternative views related to accounting for the subsequent measurement of goodwill by public business entities (PBEs) and not-for-profit entities (NFPs).

The four alternative views are:

  1. The Private Company Council (PCC) model (described in ASU 2014-02).
  2. Amortize goodwill over its expected useful life, not to exceed a specified number of years, and retain impairment testing.
  3. Direct write-off.
  4. Simplified impairment test without amortization.

Although the Board did not make any decisions, it asked its staff to conduct additional research on views (c) and (d) for PBEs. The Board will decide whether NFPs should have the option to use the PCC model or be required to apply the guidance for PBEs after it makes a decision about an alternative for PBEs.

For more information, see the related Deloitte Accounting Journal entry and the meeting notes on the FASB’s Web site.

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