On March 30, 2021, the FASB issued a narrow accounting alternative that enables private companies and not-for-profit organizations to potentially simplify the way in which they test goodwill for impairment. In this article, Thompson Reuters speaks with Scott Ehrlich, President of Mind the GAAP, to get his perspective on these new rules.
Mind the GAAP once again partnered with Wipfli LLP to issue a joint comment letter on the IFRS Discussion Paper, Business Combinations – Disclosures, Goodwill, and Impairment. The firms support many of the IASB’s specific proposals, but would recommend that IFRS (and U.S. GAAP) include a “hybrid model” that requires goodwill amortization commencing no later than five years from the date of acquisition, and ceasing no more than ten years thereafter.
Scott Ehrlich, President of Mind the GAAP, was quoted in an article by the Thompson Reuters news agency. Mr. Ehrlich provided his views on the likelihood and timing of goodwill impairment losses resulting from the COVID-19 pandemic.
As companies, both public and private, adopt the new guidance in ASC Topic 606, Revenue from Contracts with Customers, certain unexpected practice issues have begun to emerge, including how to recognize and measure deferred revenue liabilities assumed in a business combination.