Accounting for Goodwill and Other Intangible Assets

Introduction

A. Scope of Book

The purpose of this book is to examine the application of the FASB Accounting Standards Codification provisions concerning goodwill and other intangible assets, as well as to explain common practices in valuing such assets. Relevant International Financial Reporting Standards (IFRS) are also examined for goodwill and other intangible assets throughout the book.

In 2001, the Financial Accounting Standards Board (FASB) eliminated the amortization of goodwill and other indefinite-lived intangible assets when a new standard on business combinations (FAS 141) was approved. In addition, this new standard resulted in the recognition of many more types of other intangible assets. In the years since, the FASB and International Accounting Standards Board (IASB) have revised their business combinations guidance and have also amended the accounting for goodwill and other intangible assets several times.

The chapters in this book cover the rules under U.S. GAAP and IFRS, as well as some of the exceptions for small and medium enterprises (SMEs) or private companies. Chapter 1 examines the recognition of goodwill and other intangible assets. Chapter 2 examines the initial measurement of acquired goodwill and other intangible assets, followed by Chapter 3, which examines the amortization of intangible assets with finite useful lives. Chapter 4 analyzes impairments and impairment testing of goodwill and other indefinite-lived intangible assets. Chapter 5 discusses ...