Tests for Impairment of Intangible Assets

Companies may soon have more flexibility in testing for impairment of indefinite-lived intangible assets, if changes exposed for comment by the FASB in January 2012 are adopted as proposed.

This new proposal follows closely on the heels of guidance recently released for impairment tests of goodwill, and there are similarities in both the objectives and the overall approach. Like the guidance on goodwill, the proposal for other indefinite-lived intangible assets responds to concerns about the recurring cost and complexity of performing impairment tests, and the proposed relief includes an option to use qualitative assessments to determine when additional quantitative testing is necessary.

Our latest issue of the MHM Messenger highlights the proposed changes that would apply to other indefinite-lived intangible assets, including trademarks, licenses and distribution rights.

MHM Messenger 4-12: Tests for Impairment of Intangible Assets

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