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The Fasb 's Agenda Of Accounting For Goodwill

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Abstract.
This paper examines the FASB’s agenda of accounting for goodwill in public and not-for-profit entities. Research shows they are looking at four alternatives for accounting for goodwill in these entities. There is no projected completion date as of March 2015. The adoption of this proposal does not appear to help converge U.S. GAAP and IFRS.

Introduction.
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Body.
Background:
“In 2001, FASB Statement No. 142 Goodwill and Other Intangible Assets replaced APB Opinion No. 17 Intangible Assets (issued in 1970)” (Hillenmeyer & McMillen, 2013). The new statement eliminated goodwill amortization which was previously amortized over its useful life at a maximum of 40 years. Statement No. 142 required that goodwill be tested for
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In 2013, the Board endorsed the Private Company Council decision to give private companies an alternative to amortize goodwill and simplify the impairment test. After much feedback, there was an indication that many public and not-for-profit (NFP) business entities share similar concerns of cost and complexity on the annual goodwill impairment test. As a result, the Board added this project to its agenda. The objective of this project is to reduce the cost and complexity of the subsequent accounting for goodwill for public business entities and NFP entities. This project will determine if certain intangible assets, such as customer relationships and non-compete agreements, should be included in goodwill. Research will be done to identify the most appropriate useful life of goodwill if it were to be amortized and on simplifying the impairment test (Hillenmeyer & McMillen, 2013).
Examples of Previous Method: Like other public companies, Coca-Cola and Macy’s have the option of performing a qualitative assessment of goodwill before completing the quantitative two-step process described in FASB Statement No. 142. Coca-Cola and Macy’s both test intangible assets that have indefinite useful lives, such as goodwill, annually for impairment or more frequently if economic events
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