Page 2 FASB In Focus result of any one of the following transactions: a. Applying the acquisition method under Topic 805, Business Combinations b. Assessing the nature of the difference between the carrying amount of an investment and the amount of underlying equity in net assets of an investee when applying the equity method under Topic 323 on investments— equity method and joint ventures, or c. Adopting fresh-start reporting in accordance with Topic 852 on reorganizations. Publicly traded companies and not-for-profit organizations are not permitted to elect this accounting alternative. However, the Board has added a separate project to its agenda to consider the applicability of this accounting alternative to publicly traded companies and not-forprofit organizations. When Will the Amendments Be Effective? The decision to adopt the accounting alternative must be made upon the occurrence of the first transaction within the scope of this accounting alternative in fiscal years beginning after December 15, 2015, and the effective date of adoption depends on the timing of that first transaction. „„ P ublic companies and not-forprofits are not permitted to elect the alternative, but the Board added a separate project to its agenda to consider the applicability to public companies and not-for-profits. „„ If the transaction occurs in the first fiscal year beginning after December 15, 2015, the elective adoption will be effective for that fiscal year’s annual financial reporting and all interim and annual periods thereafter. If the transaction occurs in fiscal years beginning after December 15, 2016, the elective adoption will be effective in the interim period that includes the date of that first transaction and subsequent interim and annual periods thereafter. Customer-related intangible assets and noncompetition agreements that exist as of the beginning of the period of adoption would continue to be subsequently measured in accordance with Topic 350 on intangibles—goodwill and other. That is, existing customer-related intangible assets and noncompetition agreements should not be subsumed into goodwill upon adoption of this accounting alternative. Early application is permitted for any interim and annual financial statements that have not yet been made available for issuance. More information on the alternative, including a press release, is available on the FASB website and the PCC website. For more information about the project, please visit the FASB’s website at www.fasb.org. © Copyright 2014 by Financial Accounting Foundation, Norwalk, CT. Reproduction of these materials, in whole or part, shall only be as permitted by Financial Accounting Foundation. This Copyright Notice must be prominently displayed on any such reproduction. The views expressed in this document do not necessarily reflect the views of the FASB. Official positions of the FASB are arrived at only after extensive due process and deliberation. 401 Merritt 7, PO Box 5116 Norwalk, Connecticut 06856-5116 T: 203.847.0700 | F: 203.849.9714 .