Objective:

The objective of this project was to revisit the subsequent accounting for goodwill and identifiable intangible assets broadly for all entities. This included considerations for improving the decision usefulness of the information and rebalancing the cost-benefit factors.

Background:

The Post-Implementation Review of FASB Statement No. 141 (Revised 2007), Business Combinations, issued in 2013 described stakeholders’ concerns about the cost to perform the goodwill impairment test. Since then, the FASB has issued various guidance to resolve those stakeholders’ concerns. Some of those Updates were applicable to all entities, for example, Accounting Standards Updates No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment, and No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. Others are alternatives for private companies and not-for-profit entities, for example, Accounting Standards Updates No. 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill, No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination, and No. 2019-06, 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.

On October 24, 2018, the Board added to its technical agenda a broad project to revisit the subsequent accounting for goodwill and the accounting for certain identifiable intangible assets. On July 9, 2019, the staff issued an Invitation to Comment (ITC), Identifiable Intangible Assets and Subsequent Accounting for Goodwill, to obtain formal input from stakeholders focusing on public business entities on the subsequent accounting for goodwill, the accounting for certain identifiable intangible assets, and the scope of the project on those topics. Subsequently, the Board hosted public roundtable meetings on November 15, 2019, to discuss the topics included in the ITC. Click here to view the comment letter summary on the ITC or click here for the minutes from the public roundtable meetings.

The Board provided tentative decisions and leanings on the details of the subsequent accounting model until June 2022.

Final Project Update:

On June 15, 2022, the Board discussed the future direction of the project and decided to deprioritize and remove the project from its technical agenda.