October 24, 2020

FASB on Intangible Impairment Testing: Just Eyeball It

All those carrying value versus fair value exercises? Yeah, the nerds in Norwalk say you can skip those, unless – and I'm stealing this example from Compliance Week – you've got a new Coke situation on your hands:

The Financial Accounting Standards Board (FASB) today issued Accounting Standards Update No. 2012-02, Intangibles–Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. […] The amendments allow an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is "more likely than not" that the asset is impaired.

[via FASB via CW]

 

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