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Private Companies In Line for More Relief on Goodwill Accounting

Nov. 18, 2020, 7:28 PM

Private companies already get a break when it comes to accounting for the hard-to-value intangible asset called goodwill. They could get another one.

The Financial Accounting Standards Board on Wednesday agreed to float a proposal that would allow private companies to test for goodwill impairment only when they close their books at year end, when they typically issue their annual financial statements.

If finalized, it would mean private companies wouldn’t have to watch out all year for so-called triggering events—such as a major shift in the market for a product or nosediving company cash flows—that signal possible problems with the ...