FASB Issues Accounting Alternative for Private Companies on Intangible Assets in Business Combinations
The Financial Accounting Standards Board (FASB) today issued guidance intended to improve private company financial reporting regarding accounting for identifiable intangible assets in a business combination. FASB Accounting Standards Update No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination, is based on a consensus reached by the Private Company Council (PCC).
The PCC and the FASB received input from private company stakeholders indicating that the benefits of the current requirements relating to the accounting for identifiable intangible assets acquired in a business combination do not justify the related costs.
The new guidance allows a private company to elect an accounting alternative for the recognition of certain intangible assets acquired in a business combination. Read more at FASB.org.