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On the Horizon -- FASB clarifies early adoption date for simplified goodwill impairment test

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Current reporting issue
     FASB clarifies early adoption date for simplified goodwill impairment test
International Federation of Accountants (IFAC)
     IPSASB issues consultation paper on ‘heritage’ reporting



Current reporting issue

FASB clarifies early adoption date for simplified goodwill impairment test

Earlier this year, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which amends how an entity measures a goodwill impairment loss by eliminating Step 2 from the annual or interim goodwill impairment test. The ASU’s transition guidance permits early adoption “for interim and annual goodwill impairment tests with a measurement date after January 1, 2017.” However, this wording would preclude applying the amendments to an impairment test as of January 1, 2017.

The minutes from the Board’s October 10, 2016 meeting instead discuss early adoption “for all entities as of January 1, 2017.” As a result, the Board recently added the words “on or” to the transition guidance in ASC 350-20-65-3(b), Intangibles – Goodwill and Other: Goodwill, as follows: “Early adoption is permitted for interim and annual goodwill impairment tests with a measurement date on or after January 1, 2017” [emphasis added]. As such, a reporting entity can early adopt the guidance and apply it to a January 1, 2017 impairment test.

This editorial correction was made directly to the Codification through an Editorial and Maintenance Update. The Board utilizes these updates when necessary to make certain changes to the Codification that are considered nonsubstantive. No ASU containing this revised information will be issued. Readers are reminded that ASUs are not authoritative; rather, the online Codification is the only authoritative source of U.S. GAAP.



International Federation of Accountants (IFAC)

IPSASB issues consultation paper on ‘heritage’ reporting

IFAC’s International Public Sector Accounting Standards Board (IPSASB) released for comment a Consultation Paper, “Financial Reporting for Heritage in the Public Sector,” which considers issues related to financial reporting of heritage in the public sector, and aims to make improvements by

  • Identifying heritage items
  • Determining whether heritage items are assets for financial reporting purposes
  • Considering the type of information that should be reported about heritage items and heritage-related responsibilities
  • Including approaches to recognition and measurement

Heritage items are defined as items that are intended to be held indefinitely and preserved for the benefit of present and future generations because of their rarity and/or significance.

Comments on the paper are due by September 30.



© 2017 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.