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Stage Set for Significant Change to Goodwill Accounting

Dec. 16, 2020, 8:09 PM

A noncash asset that has bedeviled accountants for almost two decades could gradually disappear from company balance sheets.

U.S. accounting rulemakers on Wednesday set in motion a plan to allow companies to amortize over 10 years, or write down in pieces, the goodwill they must report when they buy another business. Steadily marking down goodwill over time would let businesses eventually erase the intangible asset instead of keeping it on their books forever and only marking it down when its value declines.

“It’s a significant change, there’s no doubt,” said Adam Brown, national assurance managing partner of accounting at BDO ...

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