What does SFAS 142 require with respect to accounting for goodwill?

SFAS 142 requires disclosure of information about goodwill and other intangible assets in the years subsequent to their acquisition that was not previously required. Required disclosures include information about the changes in the carrying amount of goodwill from period to period.

How do changes in SFS 142 Increase financial reporting?

The changes included in this Statement will improve financial reporting because the financial statements of entities that acquire goodwill and other intangible assets will better reflect the underlying economics of those assets.

How do you determine goodwill impairment?

First, the company compares the fair value of the reporting unit to its carrying amount (Step 1). If the fair value is lower, the company must then calculate any goodwill impairment charge by comparing the implied fair value of goodwill to its carrying amount (Step 2).

What is the difference between goodwill and intangible assets?

Key Differences Goodwill is a premium paid over the fair value of assets during the purchase of a company. Hence, it is tagged to a company or business and cannot be sold or purchased independently, whereas other intangible assets like licenses, patents, etc. can be sold and purchased independently.

What are the implications of sFas 141 and 142?

SFAS No. 141 and 142 affect all financial statements (i.e., balance sheet, income statement and cash-flow statement) of a corporation involved in an M&A transaction.

What is statement of financial accounting standards No.142?

FAS 142 Summary This Statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those

What does SFAS No.142 mean for goodwill?

SFAS No. 142 provides specific guidance related to the ongoing valuation of purchased goodwill. Goodwill recorded on the balance sheet is tested for impairment at least annually in a two-step process. In the first step, recorded good-will is tested for potential impairment.

What does FAS 142 mean for intangible assets?

FAS 142: Goodwill and Other Intangible Assets FAS 142 Summary This Statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those