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FASB extends private-company accounting alternatives to not-for-profit entities

  • FASB (US Financial Accounting Standards Board) Image

May 30, 2019

The FASB has issued Accounting Standards Update (ASU) No. 2019-06, “Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities.”

The ASU “enables organizations to recognize fewer items as separate intangible assets in acquisitions and to account for goodwill in a more cost-effective manner.” Under the ASU, not-for-profit entities are allowed to forgo testing goodwill for impairment annually at the reporting level and to instead use an accounting alternative in which:

  • Goodwill is amortized “over 10 years or less, on a straight-line basis.”
  • Impairment is tested “upon a triggering event.”
  • An entity has “the option to elect to test for impairment at the entity level.”

ASU 2019-06 is effective immediately. For more information, see the press release and ASU on the FASB’s Web site.

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