What is Private company goodwill alternative?
In short
Private companies and not-for-profits can elect to amortize goodwill on a straight-line basis over 10 years, or less if a shorter life is more appropriate, instead of only testing it for impairment.
Key takeaways
- Goodwill is then tested for impairment only when a triggering event occurs, not every year.
- The test can be performed at the entity level instead of the reporting unit level.
- Public business entities can't use the alternative.
Where it's tested
FAR: Intangible Assets & Goodwill — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A private company elects the private company alternative for goodwill. Goodwill is then amortized on a straight-line basis over: