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New Developments Summary: Accounting alternative for private company goodwill

This bulletin describes recently issued ASU 2014-02, Accounting for Goodwill – a consensus of the Private Company Council, which provides alternative accounting guidance that allows private companies to elect to amortize goodwill on a straight-line basis over either 10 years or less than 10 years if a shorter useful life is more appropriate. An entity that elects the alternative must also elect whether to test goodwill for impairment at the entity level or the reporting unit level. The ASU also adds the definition of a “private company” to the FASB Accounting Standards Codification® Master Glossary.

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