Contact Information Wanda Denton is with Crowe Horwath LLP and can be reached at +1 630 990 4447 or wanda.denton@crowehorwath.com. Sheryl Vander Baan is a partner with Crowe and can be reached at +1 616 752 4255 or sheryl.vanderbaan@crowehorwath.com. â– â–  ASU No. 2014-02, “Intangibles – Goodwill and Other (Topic 350): Accounting for Goodwill (a Consensus of the Private Company Council).” The FASB issued ASU 2014-02 on Jan. 16, 2014. The ASU is applicable to all entities other than public business entities and not-forprofit entities. The standard provides private entities with an alternative accounting model that permits amortization of goodwill on a straight-line basis over 10 years (or less if supportable).

The alternative accounting model classifies all goodwill existing at the beginning of the election period as a finite-lived asset. This could have implications related to valuation allowances, as it may result in taxable temporary differences that support the realization of deferred tax assets. It should be noted that the alternative accounting model does not change the prohibition on recording a DTL for the excess of book over tax goodwill. The ASU is effective for annual periods beginning after Dec.

15, 2014, and interim periods in the following year. The guidance can be adopted for any financial statement not yet issued. â– â–  ASU No. 2014-18, “Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination (a Consensus of the Private Company Council).” The FASB issued ASU 2014-18 on Dec.

23, 2014. The ASU provides an accounting alternative for private entities that acquire identifiable intangible assets in a business combination. Under the alternative, customer-related intangible assets that aren’t capable of being sold or licensed independently and noncompete agreements acquired in a business combination could be subsumed into goodwill rather than being recognized and amortized as a separately identifiable intangible asset. Some intangibles, such as commodity supply contracts, customer information, core deposits, and mortgage servicing rights, still must be recognized separately. The ASU is effective for annual and related interim periods beginning after Dec.

15, 2015, or Dec. 15, 2016, depending on the date of the first in-scope transaction and is elected in conjunction with the goodwill accounting alternative (ASU 2014-02). Early adoption is permitted.

The guidance can be adopted for any financial statement not yet issued. Conclusion Rules affecting the accounting for and reporting of income taxes continue to evolve. It appears the FASB indeed is simplifying certain aspects of accounting and reporting, including those related to income taxes. As the accounting standards continue to change, entities and their tax departments are challenged with not only staying on top of evolving federal, state, and international tax legislation, but also ensuring proper tax accounting and disclosures in an ever-shifting environment. www.crowehorwath.com In accordance with applicable professional standards, some firm services may not be available to attest clients. This material is for informational purposes only and should not be construed as financial or legal advice.

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