Small Business committee supports a more simplified approach to goodwill
Orlando Accountant
Several representatives from different auditors, small businesses, and investors told the FASB on the 30th that they back more change to the accounting approach to Goodwill, a section of U.S. GAAP that has been challenging for financial professionals. As an intangible asset, Goodwill generally includes the competitive advantage of a company in the market or the reputation of the acquired company. However, the impairment test has faced lots of criticism over time, and in response, the FASB has sought out ways to make it simpler. Companies complaint is centered on the fact that the exercise is time-consuming and complex and it often requires expensive evaluation experts for analysis. Also, investors complain about the differences between impairment occurring and the visibility of the charge. Russell Golden, the FASB Chairman the board, plans to place Goodwill on its research agenda, but he wouldn't say the direction the board was headed with it. "At this moment, I cannot provide an answer without first knowing the intangibles investors want as records in their business combination," He said.
Simplified Transition for property easements
FASB has agreed that energy companies, oil-gas companies, and utility companies holding rights of way to fit electric wires and gas pipelines will have a rather smooth transition process to the new standard of lease contracts. The board said, as soon as the new standard is set, companies will have to determine if the land easements or the new property rights they've obtained, fit with the scope of the standard. The decision of the board confirms the guidance stated in the proposed accounting standards update 2017-290, although there was a slight change in a provision in the previous proposal citing that the break was only applicable to business that had not been "assessed" their contracts before to see if they need to stick with the current guidance Topic 840. Some of the accounting and business firms said the use of the word "assessed" disqualified them from utilizing a simplified transaction process. FASB members cited the change was in line with their intention for proposed change.
Proposals for extended Audit reports are made available for comments
The AICPA's Auditing Standards Board (ASB) on November 29, released three recommendations with close relations in order to increase the information accounts have to give creditors, investors, and regulators in audit reports. This proposed guidance is intended to join the AICPA's guidance with closely related audit literature from the IAASB (International Auditing and Assurance Standards Board). The AICPA mentioned that comments ought to be submitted on or before the 15th of May, 2018. If everything goes to plan and the proposed requirements are made final, they will take effect for audits of financial statements for the reporting periods that concludes 15th of June, 2019, or later