SUMMARY OF BOARD DECISIONS
Summary of Board decisions are provided for the information and
convenience of constituents who want to follow the Board´s deliberations. All of
the conclusions reported are tentative and may be changed at future Board
meetings. Decisions are included in an Exposure Draft for formal comment only
after a formal written ballot. Decisions in an Exposure Draft may be (and often
are) changed in redeliberations based on information provided to the Board in
comment letters, at public roundtable discussions, and through other
communication channels. Decisions become final only after a formal written
ballot to issue an Accounting Standards Update.
November 2, 2011 FASB Board MeetingImpairment
of indefinite-lived intangible assets. The Board discussed how it
might improve the current guidance for testing indefinite-lived intangible
assets for impairment and reduce the costs incurred by preparers in association
with these tests.
The Board decided to provide entities with the option
of qualitatively assessing whether events or circumstances exist that indicate
it is more likely than not that an indefinite-lived intangible asset is
impaired. The term more likely than not refers to a likelihood that is
more than 50 percent. If, after assessing the totality of relevant events and
circumstances, an entity determines that it is not more likely than not
that the indefinite-lived intangible asset is impaired, then performing the
quantitative impairment test (comparing the fair value of the asset to its
carrying amount as is currently required in Subtopic 350-30,
Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill) would be
unnecessary. However, if an entity concludes otherwise, then it would be
required to perform the quantitative test. The Board also decided that
additional disclosure requirements would not be necessary relating to the use of
the optional qualitative assessment.
The Board decided to allow entities
to apply the optional qualitative assessment for all indefinite-lived intangible
assets, including those that involve significant contingencies such as
in-process research and development assets. The Board plans to acknowledge in
the proposed guidance the difficulties that may occur in performing a
qualitative assessment to identify impairments of assets that are subject to
The Board decided to exempt nonpublic entities
from the quantitative disclosures about significant unobservable inputs used in
the fair value measurements categorized within Level 3 of the fair value
hierarchy required by paragraph 820-10-50-2(bbb) (as amended by Accounting
Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments
to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.
GAAP and IFRSs) as they pertain to fair value measurements related to the
financial accounting and reporting for indefinite-lived intangible assets after
their initial recognition.
The Board directed the staff to draft a
proposed Accounting Standards Update for vote by written ballot with a public
comment period of 120 days. The Board decided that the proposed amendments would
be effective for annual and interim impairment tests performed for fiscal years
beginning after June 15, 2012, and that early adoption would be permitted.