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Goodwill Impairment Test Faces Fourth Change in 10 Years

June 23, 2021, 6:39 PM

The impairment process, which companies complain is too tricky to follow and investors lament doesn’t tell them early enough about bad business acquisitions, could face its fourth change in 10 years.

U.S. accounting rulemakers are considering yet more tweaks to the test companies follow to measure their goodwill, the hard-to-value intangible asset that gets recorded when one company buys another. Members of the Financial Accounting Standards Board on Wednesday indicated that they want to change the rules on how to test the value of goodwill while also separately allowing companies to amortize the asset, or write it off in steady ...

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