FASB Issues ASU on Impairment Test Option for Indefinite-Lived Intangible Assets

NORWALK, Conn.—The Financial Accounting Standards Board July 27 issued an accounting standards update aimed at simplifying the impairment assessment of an indefinite-lived intangible asset and improving the consistency of the testing of such assets.

The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after Sept. 15 and permits early adoption. Examples of indefinite-lived intangible assets would include licenses, trademarks, and distribution rights.

The accounting provisions will reduce the cost and complexity of performing an impairment test for such assets and improve consistency in impairment testing guidance among long-lived asset categories, FASB said.

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