FASB Issues Exposure Draft on Business Combinations
The revised Exposure Draft contains the FASB’s tentative decisions requiring use of a nonamortization approach to account for purchased goodwill. Under that approach, goodwill would not be amortized to earnings, as originally proposed. Instead, it would be reviewed for impairment, that is, written down and expensed against earnings only in the periods in which the recorded value of goodwill exceeded its implied fair value.
This revised Exposure Draft is issued for public comment. The comment period will end on March 16, 2001.