Choosing simplicity over precision, the Financial Accounting Standards Board has decided it will do away with the onerous second step of the goodwill impairment test.
FASB met recently to discuss feedback to its May 2016 proposal to revise goodwill impairment testing in a way that would put an end to “step two,” the controversial and complex fair value exercise companies must complete when they conclude goodwill for a particular reporting unit is not holding up. The board proposed dropping the step after already making it simpler for private companies through its Private Company Council.
