In January 2017, the FASB issued additional revised guidance for goodwill impairment testing that’s intended to make the process easier and less costly. The latest amendments establish a one-step process for testing goodwill for a decrease in value. This article explains what goodwill is, why and how companies test for goodwill impairment, and how the FASB has simplified the process over the years. Though companies welcome a simpler goodwill reporting model, some FASB members have expressed concerns about the latest update.
The FASB has released a new accounting standard that responds to some of the concerns prompted by the global financial crisis about financial institutions’ reporting on credit losses. ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326), requires earlier measurements of credit losses on loans and other financial instruments, expands the range of information considered in determining expected credit losses, and enhances disclosures. This article explains the issues with the existing reporting requirements and details a new forward-looking reporting model.
The FASB has issued its long-awaited update revising the treatment of leases under U.S. GAAP. ASU No. 2016-02, Leases (Topic 842), will affect companies that lease real estate, vehicles, construction and manufacturing equipment, and other assets. The standard requires these businesses to recognize most leases on their balance sheets, potentially inflating their reported assets and liabilities. This article details the impact of the new standard on lessees and lessors and explains how it affects combined contracts.
What FASB standards are in store for 2016? As you plan for the year ahead, you may wonder how changes to the accounting standards might affect the information you report on your company’s financial statements, including how it’s presented and what details are disclosed. The Financial Accounting Standards Board (FASB) establishes the standards for public