The Board decided in today's meeting to delay the effective date for adoption of the goodwill and intangible asset portion of the business combinations exposure draft to fiscal years beginning after December 15, 2001, permitting early adoption for fiscal years beginning after March 31, 2001 if financial statements for the first quarter have not yet been reported. This means that goodwill amortization will continue through year-end. Discussion is continuing on when the first impairment analysis will be required given the new adoption date and whether or not initial impairments may be reported as a change in accounting principle. Adoption of the business combinations portion of the exposure draft is still anticipated to be required for acquisitions subsequent to June 30, 2001. The main implication of this is that more excess purchase price is expected to be allocated to identifiable intangible assets rather than goodwill for acquisitions completed after this date. The pooling-of-interests method of accounting for business combinations is still anticipated to be eliminated as of June 30, 2001.
Propose a subject line for this email?
Goodwill Exposure Draft