After simplifying the impairment test for goodwill, the Financial Accounting Standards Board has issued a proposal to extend the same testing simplification to indefinite-lived intangible assets, such as licenses, distribution rights, and trademarks with an indefinite shelf life.
FASB has published a proposed Accounting Standards Update that would add a preliminary but optional step to the front end of the current impairment test intended to allow preparers to bypass a complete, quantitative analysis when it seems obvious enough that the full test shouldn’t be necessary. It would allow preparers to assess qualitative factors to determine whether it’s more likely than not that a given asset is not impaired.
