Must be original not copied and has to pass turnitin Explore

Must be original not copied and has to pass turnitin.

Explore the FASB Codification section related to intangible assets (§350). Explain how specific intangibles might be treated within a particular industry, and justify why this methodology is appropriate.post should be 250-500 words. Again must be original and must cite source.

Solution

FASB codification relating to intangibles:

350 require an entity to conduct goodwill impairment test at least annually by comparing the fair value & the carrying amount. Some concerns were raised on the first step of the two step process of impairment test. To resolve this, the board solicited input from private company financial reporting committee (PCFRC) which came up with update no 2010-28 where it asked the board to allow all non public entities to use the qualitative approach even when the carrying amount is greater than zero. In this case the entity can perform the qualitative test before deciding whether it has to calculate the fair value of the unit under the first step of two step process. This is applicable to everyone who report goodwill in their financial statements.

The objective of this amendment is to bring down the cost of performing an impairment test for intangible assets. The amendment will first make an entity to evaluate the qualitative factors to decide whether it is necessary to perform the quantitative impairment test according to subtopic 350-30, intangibles – goodwill & other intangibles – general intangibles other than goodwill.

According to this amendment, the entity need not calculate the fair value of an intangible asset if it determines that the asset is not likely to be impaired. If after conducting the test, the entity decides that it is not likely that the asset is impaired then no further step is required. If it is vice versa, then it is required to determine the fair value & perform the impairment test by comparing the fair value with the carrying amount according to 350-30.

Why it is appropriate?

It is appropriate because the amendments help in addressing the concerns of the stakeholders because it can reduce the cost of performing an impairment test.

The amendments are also easy from operational viewpoint, easily auditable & can reduce the costs for many entities.

It also provides a sought of relief to preparers in case of stable & favorable economic environment without influencing the information in the financial statements.

source of information:

https://www.fasb.org/cs/BlobServer?blobkey=id&blobwhere...blobheader.