Dataline: Goodwill impairment -- FASB issues guidance that simplifies goodwill impairment test and allows early adoption (No. 2011-28)

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Dataline 09/29/2011 by Assurance services
Dataline: Goodwill impairment -- FASB issues guidance that simplifies goodwill impairment test and allows early adoption (No. 2011-28)

At a glance

The FASB issued ASU 2011-08, Testing Goodwill for Impairment (the revised standard) on September 15, 2011. The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test by providing both public and nonpublic entities with the option of performing a "qualitative" assessment to determine whether further impairment testing is necessary. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted for certain companies. This Dataline provides details and insights on the revised standard.

The FASB issued Accounting Standards Update No. 2011-08, Testing Good will for Impairment(the revised standard) on September 15, 2011. The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test by providing both public and nonpublic entities with the option of performing a "qualitative" assessment to determine whether further impairment testing is necessary.

The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. However, an entity can choose to early adopt the revised standard even if its annual test date is before September 15, 2011 (the date on which the revised standard was issued), provided that the entity has not yet issued its financial statements for the period that includes its annual test date.

This Dataline provides details and insights on the revised standard.