Article

FASB Proposes Extending Goodwill and Identifiable Intangibles Alternatives to Nonprofits

December 20, 2018

A recently proposed Accounting Standards Update (“ASU”) aims to help nonprofits account for goodwill and calculate certain identifiable intangible assets. Proposed ASU No. 2018-320, 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, extends an accounting alternative from the Private Company Council that allows nonprofits to amortize goodwill over 10 years or less on a straight-line basis. Nonprofits could also use the accounting alternative to test for impairment upon a triggering event, opt for an impairment test at the entity level, and choose to incorporate certain customer-related intangible assets and all non-compete agreements into goodwill.

Comments on the proposal are due to the Financial Accounting Standards Board by February 18, 2019.