Many merging nonprofits, including educational institutions and hospitals, welcome these practical methods.
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October 17, 2019 




Hi There!,

As you know, we are members of one of the world’s leading accountancy networks, Moore Stephens International – now known as Moore Global. Along with our fellow member firms in more than 110 countries we are introducing the new Moore visual identity.

We will now be known as Moore Doeren Mayhew instead of Moore Stephens Doeren Mayhew. You’ll see this new look across our website, enewsletter, blog, social media and all our documentation.

Our new visual identity sets out clearly and boldly what we stand for: to help you thrive in a changing world.

This brand change has no impact on how we do business with our clients. We will continue to carry on with business as usual and maintain the same service clients have come to expect from us. We are not being acquired or merging with any of the other member firms that share our name.

We remain committed to helping you thrive in a changing world, locally, nationally and internationally. Please feel free to contact me to find out more or discuss any aspect of these exciting changes.

Thank you.

Joe Amine

Joseph A. Amine, CPA
+1 (248) 244-3040

Two Alternatives for Reporting Goodwill and Other Intangibles for Nonprofits

Did you know that the Financial Accounting Standards Board (FASB) recently extended the simplified private-company accounting alternatives to not-for-profit organizations? Many merging nonprofits, including educational institutions and hospitals, welcome these practical methods. Here are the details.

Alternative for goodwill

The first alternative accounting method allows for the amortization of goodwill on a straight-line basis over 10 years (or less if a shorter useful life is more appropriate). It applies only to:

  • Goodwill recognized in a business combination after initial recognition and measurement,
  • Amounts recognized as goodwill in applying the equity method of accounting, and
  • The excess reorganization value recognized by entities that adopt fresh-start reporting under U.S. Generally Accepted Accounting Principles (GAAP) for reorganizations.

Once an alternative has been elected, the organization must apply all the alternative’s subsequent measurement, derecognition, presentation and disclosure requirements to existing goodwill and all future additions to goodwill that fall within the scope of the accounting alternative.

Upon adoption of the accounting alternative, the organization must decide whether to test goodwill at either the entity level or the reporting unit level. However, annual impairment testing isn’t required under the alternative. Rather, testing for impairment is required only if a triggering event occurs that indicates that the fair value of the nonprofit entity (or the reporting unit) may be below its carrying amount.

Alternative for identifiable intangible assets

The second accounting alternative allows a nonprofit organization to bypass the separate recognition of noncompete agreements and customer-related intangible assets unless they can be sold or licensed independently from other assets of a business. In other words, such items would be considered part of goodwill. Nonprofits that elect this alternative would recognize fewer intangible assets in a business combination.

It applies to nonprofit organizations that are required to recognize or consider fair value of intangible assets when:

  • Applying the acquisition method for a business combination,
  • Evaluating the nature of a difference between an investment’s carrying amount and the underlying equity in the net asset of an investee when applying the equity method of accounting, or
  • Adopting fresh start accounting for reorganizations.

If an organization decides to elect the accounting alternative for accounting for identifiable intangible assets, it also must adopt the accounting alternative for goodwill. However, a nonprofit that elects to adopt the accounting alternative for goodwill isn’t required to adopt the accounting alternative for accounting for identifiable intangible assets.

Effective date and transition

Nonprofits can immediately elect to use these alternative reporting methods. If elected, the goodwill accounting alternative should be applied prospectively to all existing goodwill and for all new goodwill generated in acquisitions. And the alternative for accounting for identifiable intangible assets should be applied prospectively upon the occurrence of the first transaction within the scope of the alternative. Contact us for more information. Our accounting professionals can help determine if these alternatives are right for your organization.



James L. Noteman, CPA
+1 (248) 244-3250


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