FASB Approves Private Company and Not-for-Profit Goodwill Triggering Event Alternative
The Financial Accounting Standards Board (FASB) voted Wednesday, February 10, 2021, to provide private companies and not-for-profits with an alternative to the requirement to monitor and evaluate goodwill impairment triggering events throughout the fiscal year and potentially measure a goodwill impairment at the date of triggering events.

The new accounting alternative will allow private companies and not-for-profits to perform the goodwill impairment triggering event assessment at the reporting date any time they report financial information, including interim reports.

The FASB also affirmed the following decisions:

  • The disclosures required by FASB Accounting Standards Codification (ASC) Topic 235, Notes to Financial Statements, and Subtopic 350-20, Intangibles — Goodwill and Other — Goodwill, are sufficient and that incremental disclosures should not be required
  • Allow a one-time transition permitting an entity to adopt the proposed amendments without applying the guidance on preferability in Topic 250, Accounting Changes and Error Corrections
  • Make the amendments available on an ongoing basis and not provide a sunset date for the amendments

“Knowing that there has been an impairment is a lot more meaningful than knowing the exact date when it occurred,” FASB member Marsha Hunt said during the board meeting, “… I think that, overall, we’re coming up with a position that allows private companies to perform the calculations that are meaningful and to publish balance sheets on their reporting dates that will be useful.”

The FASB instructed its staff to prepare a final standard that will be put to a written vote at an upcoming board meeting.
For more information on these alternatives, contact your ACT representative or email us at info@actcpas.com.