Developments Of Note
FASB Issues Final Statements Eliminating Pooling-Of-Interests Accounting For Business Combinations And Goodwill Amortization
The Financial Accounting Standards Board ("FASB") concluded its controversial re-assessment of the accounting rules for business combinations by releasing two complementary statements, FASB Nos. 141 and 142. FASB No. 141, Business Combinations, eliminates the popular pooling-of-interests accounting method for business combinations initiated after June 30, 2001. FASB No. 142, Goodwill and Other Intangible Assets, requires that goodwill no longer be amortized, but instead be periodically reviewed for impairment. The amortization of goodwill ceases upon adoption of the statement, which, for most companies, will be January 1, 2002. In FASB’s view, FASB No. 141 improves the transparency of the accounting and reporting for business combinations by requiring that all business combinations be accounted for under a single method, the purchase
