The Financial Reporting Executive Committee (FinREC) of the AICPA has expressed its support for FASB’s proposal to extend accounting alternatives for goodwill and certain identifiable intangible assets to not-for-profit entities.
The comments came in a February 1, 2019 letter in response to FASB’s proposed Accounting Standards Update (ASU), Intangibles—Goodwill and Other (Topic 350),Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958), Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities.
The letter stated, “FinREC supports the Board’s intent to extend the scope of the accounting alternatives provided in Accounting Standards Updates (ASUs) 2014-02 and 2014-18 to not-for-profit entities (NFPs). We agree that the benefits of the current accounting for goodwill and identifiable intangible assets acquired in an acquisition by an NFP do not justify the related costs. By providing accounting alternatives, the amendments in this proposed update would reduce the cost and complexity associated with the subsequent accounting for goodwill and the measurement of certain identifiable intangible assets acquired without significantly diminishing decision-useful information for users of NFP financial statements.”
Read the comment letter.