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FASB Issues ASU 2014-18 Exempting Private Companies From Recognizing Some Intangible Assets

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The FASB has recently issued an Accounting Standards Update (ASU) for intangible assets in a business combination for private companies.  This allows private companies to avoid recognition of hard to value intangibles in a purchase or merger. These intangible assets have historically been difficult to value independent of other goodwill created in a business combination.  If adopted, private companies acquiring hard to value intangibles such as non-compete agreements can now group those assets with goodwill, which could greatly simplify accounting in an acquisition.

If adopted, the standard requires adoption of the Goodwill (amortization) ASU which was also issued during 2014.  Early adoption is permitted, including any financial statement that has not been issued previously. Otherwise, the standard is effective for fiscal years that begin after 12/15/15.

For the full amendment, see the following link to the FASB website: http://www.fasb.org/resources/ccurl/218/786/ASU%202014-18.pdf