Defining Issues | May 2019

FASB extends private company alternatives to not-for-profits

KPMG reports on the FASB's amendments to ASC 350, ASC 805 and ASC 958. NFPs are permitted to include certain intangible assets with goodwill, amortize goodwill over a period of up to 10 years and test goodwill for impairment at either the entity level or the reporting unit level when a triggering event occurs.


ASU 2019-06

  • All not-for-profit entities, including those that are conduit bond obligors

Relevant dates

  • The amendments are effective immediately. An NFP may adopt these alternatives at any time without having to demonstrate preferability.

Key impacts

  • An NFP may elect to amortize goodwill on a straight-line basis over 10 years (unless a shorter useful life is more appropriate)  
  • Under this election, an NFP is required to test goodwill for impairment only when a triggering event occurs and is permitted to test at either the entity level or the reporting unit level
  • An NFP may elect not to separately recognize intangible assets related to (1) certain customer-related intangible assets and (2) noncompete agreements when applying the acquisition method and in certain other limited circumstances
  • The alternatives are intended to (1) reduce the frequency of impairment tests, (2) simplify the impairment test when it is required and (3) result in recognition of fewer intangible assets in future business combinations

Report contents

  • Applicability
  • Key facts and impacts
  • Goodwill Accounting Alternative
  • Identifiable Intangible Assets Accounting Alternative
  • Effective dates and transition
  • Related project



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