Paper losses loom for companies with high goodwill
The FASB removes a step from its goodwill impairment test amid concerns it makes the process too complex and expensive. Corporates with a lot of goodwill compared with fair value of reporting units could see nasty paper losses..
The Financing and Accounting Standards Board (FASB) says it will remove ‘step 2’ from the three-step goodwill impairment test amid concerns from private companies about its complexity and cost. However, the new measurements may result in companies losing money on the balance sheet.
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