The Financial Accounting Standards Board
(FASB) has proposed an accounting standards update on
indefinite-lived intangible asset impairment testing.

The change will not require the calculation of
the fair value of an indefinite-lived intangible asset unless the
organisation determines, based on a qualitative assessment, that it
is “more likely than not” the asset’s fair value is less than its
carrying amount. 

Indefinite-lived trademarks, licenses and
distribution rights are some of the intangible assets subject to
the proposal.

“This proposed amendment is intended to reduce
the cost of evaluating indefinite-lived intangible assets for
impairment without changing the information provided to investors,”
FASB chairman Leslie Seidman said.

The update would be effective for annual and
interim impairment tests performed for fiscal years beginning after
15 June2012. Early adoption would be permitted. 


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