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FASB Issues a New Accounting Alternative Option Covering Goodwill and Impairment Triggering Events

04.28.2021

The Financial Accounting Standards Board has issued a new accounting alternative option for private entities and not-for-profit organizations that covers goodwill and impairment triggering events.

The new accounting alternative provides private companies and not-for-profit entities with an accounting alternative to perform a goodwill impairment triggering event evaluation as required in Subtopic 350-20 as of the end of the reporting period, whether the reporting period is an interim or annual period.

An entity that elects this alternative is not required to monitor for goodwill impairment triggering events during the reporting period but, instead, should evaluate the facts and circumstances as of the end of each reporting period to determine whether a triggering event exists and, if so, assess the likelihood that goodwill is impaired.

An entity that does not elect the accounting alternative for amortizing goodwill and that performs its annual impairment test as of a date other than the annual reporting date should perform a triggering event evaluation only as of the end of the reporting period.

If you have questions or need assistance, please feel free to contact Dan Ward at 314.983.1237 or dward@bswllc.com.

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