The Financial Accounting Standards Board has finalized a new standard aimed at simplifying how organizations test goodwill for impairment.
The new standard, known as
Under that option, an entity no longer would be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The guidance also includes examples of the types of events and circumstances to consider in conducting the qualitative assessment.
The amendments will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after Dec. 15, 2011, although early adoption is also permitted.
For more information, see the Aug. 12, 2011 edition of