The Financial Accounting Standards Board voted Monday to endorse two accounting standards proposed by the Private Company Council pertaining to accounting for goodwill subsequent to a business combination and for certain types of interest rate swaps in an effort to modify the existing accounting standards for private companies.
The final standards are expected to be issued by the end of the year. The standard for Accounting for Goodwill Subsequent to a Business Combination would permit a private company to subsequently amortize goodwill over a period of ten years, or less under certain circumstances, and to apply a simplified impairment model to goodwill. Goodwill is the residual asset recognized in a business combination after recognizing all other identifiable assets acquired and liabilities assumed.
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