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FASB responded to an urgent pandemic-related accounting concern Wednesday by voting to provide private companies and not-for-profits with an alternative to the requirement to monitor and evaluate goodwill impairment triggering events throughout the fiscal year and potentially measure a goodwill impairment at the date of triggering events.

FASB voted Wednesday to provide an accounting alternative allowing private companies and not-for-profits to perform the goodwill impairment triggering event assessment at the reporting date any time they report financial information, including interim reports.

That’s an expansion of the scope described in Proposed Accounting Standards Update, Intangibles — Goodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events (that was issued in December 2020), which was limited to private companies and not-for-profits that report goodwill only on an annual basis. Many commenters, including the AICPA Private Companies Practice Section Technical Issues Committee (TIC), had urged expanding the scope of the alternative so that it could be used by more private companies and not-for-profits.

TIC said that under the previously proposed scope, “very few private companies and NFPs would be eligible to apply this alternative as drafted.”

In addition to expanding the scope, FASB affirmed the following decisions:

• The disclosures required by FASB ASC Topic 235, Notes to Financial Statements, and Subtopic 350-20, Intangibles — Goodwill and Other — Goodwill, are sufficient and that incremental disclosures should not be required.
• Allow a one-time transition permitting an entity to adopt the proposed amendments without applying the guidance on preferability in Topic 250, Accounting Changes and Error Corrections.
• Make the amendments available on an ongoing basis and not provide a sunset date for the amendments.