The FASB endorses three Private Company Council proposals.
On June 10, 2013, the Financial Accounting Standards Board (FASB) voted to endorse three proposals from the Private Company Council (PCC). The proposals describe alternatives within U.S. GAAP that involve accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps.
Under the first proposal, private companies wouldn't be required to separately recognize certain intangible assets acquired in a business combination. Private companies that elect the alternative only have to recognize those intangible assets arising from noncancelable contractual terms or those arising from other legal rights. The second proposal allows for amortization of goodwill and a simplified goodwill impairment model, enabling private companies that elect the alternative to amortize goodwill over the useful life of the primary asset acquired in a business combination, not to exceed 10 years. The third proposal contains two simpler approaches to accounting for certain types of interest rate swaps that a private company enters for the purposes of economically converting its variable-rate borrowing to a fixed-rate borrowing. Both approaches would apply to all private companies except financial institutions.
The proposed alternatives are expected to be issued for public comment. The IMA[R] Small Business Financial and Regulatory Affairs Committee (SBFRC) and IMA's other technical committees will continue to monitor these projects and determine whether to submit a letter of comment. The advocacy efforts of these IMA committees, including previous comment letters, can be viewed at www.imanet.org/about_ima/advocacy_activity.aspx.
By Stephen Barlas, Christopher Dowsett, Ashutosh Srivastava
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|Title Annotation:||NEWS; Financial Accounting Standards Board|
|Article Type:||Brief article|
|Date:||Jul 1, 2013|
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