The Financial Accounting Standards Board issued an
The Private Company Council had worked with FASB in 2014 to issue two private company alternatives on accounting for goodwill and accounting for identifiable intangible assets in a business combination, which stakeholders told the board would also benefit not-for-profit organizations. This update extends the scope of these alternatives to nonprofits, enabling organizations to recognize fewer items as separate intangible assets in acquisitions and to account for goodwill in a more cost-effective manner.
The standards update also makes it so that, instead of testing goodwill for impairment annually at the reporting unit level, a not-for-profit organization that elects the accounting alternative will:
- Amortize goodwill over 10 years or less, on a straight-line basis;
- Test for impairment upon a triggering event; and,
- Have the option to elect to test for impairment at the entity level.
The full accounting standards update is available on the