Pershing Yoakley & Associates, P.C., is pleased to present the March 2012 Audit & Accounting Update. This update is designed to provide direct access to current audit and accounting information that is relevant to you.
FASB Activities
Exposure Drafts
The Financial Accounting Standards Board (“FASB”) has released Proposed Accounting Standards Update (“PASU”), Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. A summary of this PASU is provided below:
In January 2012, FASB issued this PASU in response to concerns regarding the cost and complexity of testing indefinite-lived intangible assets (other than goodwill) for impairment, as currently required under Accounting Standards Codification (“ASC”) Topic 350, Intangibles – Goodwill and Other. The objective of this PASU is to simplify how an entity is required to test indefinite-lived intangible assets for impairment.
This PASU introduces a qualitative approach for testing these assets for impairment whereby an entity would be allowed to first determine whether it was more likely than not (or a likelihood of greater than 50 percent) that the asset’s fair value exceeds its carrying amount. If this determination can be made, additional testing is not required. However, if the qualitative analysis suggests that it is more likely than not that the carrying amount of the asset exceeds its fair value, the entity would be required to calculate the fair value of the intangible asset and recognize an impairment loss to the extent the fair value exceeds carrying value, as currently required by ASC 350. This PASU includes examples of events and circumstances that an entity should consider when performing the qualitative analysis.
The FASB will accept comments on this PASU until April 24, 2012. If passed, the amendments would be effective for impairment tests performed for fiscal years beginning after June 15, 2012, with early adoption permitted.
For more information, please contact the experts listed below at PYA, (800) 270-9629.
