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FASB issues proposed ASU that would extend private-company accounting alternatives to NFPs

  • FASB document Image

Dec 21, 2018

The FASB has issued a proposed Accounting Standards Update (ASU), “Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities,” to reduce complexity for not-for-profit (NFP) organizations.

The proposed ASU would allow NFPs to forgo testing goodwill for impairment annually at the reporting level and instead use an accounting alternative that would:

  • “Amortize goodwill over 10 years or less, on a straight-line basis
  • Test for impairment upon a triggering event
  • Have the option to elect to test for impairment at the entity level, and
  • Have the option to subsume certain customer-related intangible assets and all non-compete agreements into goodwill.”

Comments on the proposed ASU are due by February 18, 2019. For more information, see the press release and proposed ASU on the FASB’s Web site.

On December 20, 2018, the FASB issued for comment Proposed Taxonomy Improvements for Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities. Comments on the proposed taxonomy improvements are due by February 18, 2019.

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