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Accounting Standards for Private Enterprises

Subsequent Measurement of Goodwill and Acquired Intangible Assets

Summary

The Accounting Standards Board (AcSB) was made aware of challenges faced by private enterprises with respect to the recognition of intangible assets and subsequent measurement of goodwill. More specifically, preparers have mentioned the cost and complexity of:

  • estimating the fair value of certain intangible assets acquired in a business combination; and
  • carrying out the goodwill impairment tests.

In addition, the Board has received feedback that goodwill and quantitative information about some intangible assets may not be decision-useful for financial statement users of private enterprises and not-for-profit organizations.

We have decided to undertake a project to better understand how the following considerations affect private enterprises and not-for-profit organizations:

  • the current challenges with the recognition of intangible assets acquired in a business combination and the subsequent measurement of goodwill
  • the information needs of financial statement users

As part of this project, we will also explore whether to propose relief from the recognition of intangible assets acquired in a business combination and whether we should propose a change to allow entities to amortize goodwill.

Staff Contact(s)

Dominique Hamel, MSc, CPA Principal, Accounting Standards

Jayshal Rajendra Daya, CPA, CA Principal, Accounting Standards Board

Project Status

  • Information gathering

    The AcSB undertook research to better understand the current challenges with the recognition of intangible assets acquired in a business combination and the subsequent measurement of goodwill

  • Approving project

    In March 2024, the AcSB approved a project to develop an exposure draft

  • Engaging Communities

    The AcSB is conducting public outreach to inform exposure draft proposals

    The AcSB is developing proposals to include in an exposure draft

  • Deliberating feedback
  • Final pronouncement

Webinar – Domestic Accounting Standards Update (Spring 2024)

Watch our recorded webinar to learn about current projects and recent amendments in Parts II, III, and IV of the CPA Canada Handbook – Accounting.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.