If a private company elects to apply the goodwill accounting alternative in ASC 350-20, Intangibles-Goodwill and Other, and further elects to test goodwill for impairment at the entity level (rather than at a reporting unit level), the application of ASC 280 (to identify operating segments as a starting point for determining reporting units) would not be applicable. See FSP 25.2 (after ASU 2023-07) and FSP 25.2A (before ASU 2023-07) for discussion of private companies that have not elected to apply the goodwill accounting alternative in ASC 350-20 or that have elected to apply the alternative but still test goodwill impairment at the reporting unit level.

While the disclosures of ASC 280 are not required for private companies, some private companies believe these elective disclosures are meaningful to the financial statement users, particularly those that anticipate an initial public offering in the near term. A private company that chooses to disclose segment information need not apply the disclosure requirements of ASC 280 in their entirety.