Developments of Note
FASB Proposes Accounting for all Business Combinations Using the Purchase Method
The FASB issued a Proposed Statement of Financial Accounting Standards (the "Statement") that would amend APB Opinion No. 16, Business Combinations, and supersede APB Opinion No. 17, Intangible Assets, to require all business combinations (i.e., transactions by which an enterprise acquires all or portion of the assets that constitute a business or equity interest of one or more enterprises) to be accounted for using the purchase method. The pooling-of-interest method would be prohibited. The Statement would amend Opinion No. 17 to establish a presumption that the useful economic life of an identifiable intangible asset is no more than 20 years, and to require recognition of goodwill as an asset and its amortization on a straight-line basis over its useful economic life, not to exceed 20 years. The Statement also would change financial statement presentation to require goodwill
