Goodwill Accounting Could Go Back to the Future

It was the end of the dot-com bubble and the height of mega mergers like America Online and Time Warner Cable.

The economy was changing rapidly, and to keep up the Financial Accounting Standards Board in 2001 issued what was considered a major change. It forced companies to own up when mergers don’t go as planned and write down the intangible asset known as goodwill when its value declined.

The change killed a long-standing practice that allowed companies to amortize, or write down in chunks, the value of the asset—like a purchased company’s brand name—that arises when one company buys ...