Government

FASB publishes alternative to goodwill triggering event evaluation

The board expects the new method will provide an accounting alternative expected to reduce the complexity for private companies and not-for-profit organizations

The Financial Accounting Standards Board (FASB) has issued guidance regarding a recent Accounting Standards Update (ASU).

The board expects the new accounting alternative to reduce the complexity for private companies and not-for-profit organizations when performing the goodwill triggering event evaluation.

Organizations are required under law to monitor for and evaluate goodwill triggering events when they occur throughout the year.

According to the FASB, the new alternative eliminates the requirement for companies and organizations that elect this alternative to perform this assessment during the reporting period.

In a statement, the FASB said: “To address this, the ASU provides an accounting alternative that allows private companies and not-for-profit organizations to perform a goodwill triggering event assessment, and any resulting test for goodwill impairment, as of the end of the reporting period, whether the reporting period is an interim or annual period.

“It eliminates the requirement for companies and organizations that elect this alternative to perform this assessment during the reporting period, limiting it to the reporting date only.”

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