Private ownership does not switch the accounting automatically. The workpaper must state eligibility, the election made, its effective period, the supported amortization life, and whether the related identifiable-intangible alternative was elected where applicable.
Under the supplied goodwill alternative, goodwill is amortized over ten years or a shorter demonstrated useful life and is tested for impairment on the applicable triggering-event basis, with the permitted unit election controlled. The identifiable-intangible alternative has its own scope and relationship to the goodwill election.
Keep a public-company answer and an elected private-company answer in separate columns. A shorter calculation is not evidence that the alternative applies.
Apply the distinction
Private ownership alone changes nothing. The file must establish eligibility, election, effective period, amortization life, impairment unit, and any linked identifiable-intangible election before the alternative affects a schedule. Eligibility must be documented before any alternative is used.
Authority
Read ASC 350-20-15-4 for the policy election available to an eligible private company or not-for-profit entity.
Put the concept to work
Analyze this concept
- Verify supplied eligibility and election facts before applying the goodwill amortization and simplified impairment alternative, and distinguish the linked identifiable-intangible election.
Learning resources
Choose a lesson, try an application, or inspect the sources behind this concept.
Build on these ideas
- Goodwill — Apply
To analyze this concept: Required. The learner must understand the core goodwill residual before applying an alternative subsequent model.