On January 26

On January 26, 2017, FASB released a new issue of Accounting Standards Update and it has a promising effect as it simplifies the goodwill impairment test. In this update, Step 2 has been completely eliminated. As a result, under the new and updated model, a body would be able to perform its impairment test employing the disparity that is present between the carrying amount and the fair value of the reporting unit. I like this new standard because this standard is very promising and it would make the financial reporting simpler and less complex. This new standard according to me would also prove helpful as all reporting units whether they are having more or zero carrying amounts would be able to perform the same goodwill impairment test. This standard has abolished the fact that in order to measure the goodwill impairment, one has to look at the fair value of individual assets thus it has made this standard more applicable to public and other business bodies.