Project Update

Impairment of Indefinite-Lived Intangible Assets

Last updated on July 30, 2012.

(Updated sections are indicated with an asterisk *)


Project Objective
*Due Process Documents
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Next Steps
Board/Other Public Meeting Dates
Background Information
Contact Information

Project Objective

The primary objective of the Impairment of Indefinite-Lived Intangible Assets project is to simplify how an entity tests indefinite-lived intangibles assets other than goodwill for impairment. Another objective of the project is to improve the consistency of impairment testing guidance among long-term asset categories.

*Due Process Documents

On July 27, 2012, the Board completed this project with the issuance of Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.
 
*Decisions Reached at Last Meeting

Please see Board meeting minutes below.

*Summary of Decisions Reached to Date (as of July 27, 2012)

Please see Accounting Standards Update No. 2012-02.

*Next Steps

None.

Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

June 6, 2012 Board Meeting—Decision about issuance of a final Accounting Standards Update
January 11, 2012 Board Meeting—Decision about issuance of a proposed Accounting Standards Update
November 2, 1011 Board Meeting—Decision about issuance of a proposed Accounting Standards Update
September 7, 2011 Board Meeting—Agenda decision announcement

Background Information

Current guidance under Topic 350, Intangibles—Goodwill and Other, requires indefinite-lived intangible assets to be tested for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. Examples of interim impairment indicators for indefinite-lived intangible assets are combined with the guidance for evaluating impairment indicators for long-lived tangible assets included in Topic 360, Property, Plant, and Equipment. The impairment test for indefinite-lived intangible assets is a single-step test that compares the fair value of the asset with its carrying amount. The FASB received input from respondents to the proposed Accounting Standards Update, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which stated that the Board should simplify the guidance for testing indefinite-lived intangible assets for impairment. Many constituents indicated concerns about the recurring cost and complexity of calculating the fair value of indefinite-lived intangible assets when the risk of impairment is unlikely. As a result of those concerns, some constituents recommended that the Board consider a qualitative approach or other alternative approaches for assessing indefinite-lived intangible assets for impairment.

Contact Information

Rahul Gupta
Practice Fellow
rgupta@fasb.org

Marguerite Ward
Postgraduate Technical Assistant
mfward@fasb.org