FASB Issues Exposure Draft on Business Combinations

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February 14, 2001 - The Financial Accounting Standards Board has released its limited revision of the proposed statement, "Business Combinations and Intangible Assets - Accounting for Goodwill."

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.

You may download the 64-page document. You must have Adobe Acrobat software to access this document.

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