Implementing The Guidelines: FASB Statement 142
FASB 142 Overview
In July 2001, the Financial Accounting Standards Board (FASB) formally issued new standards on the treatment of Goodwill and other intangible assets in Statement 142, Goodwill and Other Intangible Assets. With limited exceptions, Statement 142 applies to fiscal years beginning after December 15, 2001.
According to FASB Statement 142, companies may no longer amortize Goodwill annually. Instead, Goodwill must be tested for impairment at the reporting unit level on an annual basis. The Statement defines impairment simply as the extent to which the Carrying Amount of Goodwill or an intangible asset exceeds its Fair Value (“Value”). Additionally, companies must perform a similar and separate analysis on any other intangible assets carried on its books. Click on the link to see the entire overview.