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Certain presentation and disclosure requirements discussed in this chapter are only required for SEC registrants. In some instances, the difference in requirements is due to differences in US GAAP. These differences are discussed in FSP 8.10.1 and FSP 8.10.2.
The remaining differences are due to incremental presentation and disclosure requirements mandated by the SEC. These are summarized in Figure FSP 8-1 in FSP 8.10.4.

8.10.1 Indefinite-lived intangible assets (private companies)

In accordance with ASC 350-30-50-3A, when disclosing an indefinite-lived intangible asset after its initial recognition, a private company is not required to disclose the quantitative information about significant unobservable inputs used in fair value measurements categorized within Level 3 of the fair value hierarchy required by paragraph ASC 820-10-50-2(bbb).

8.10.2 Goodwill impairment evaluation (private companies) 

New guidance
In March 2021, the FASB issued ASU 2021-03, Accounting Alternative for Evaluating Triggering Events. ASU 2021-03 provides eligible private companies and not-for-profit entities an accounting policy election to apply an alternative method for evaluating goodwill impairment triggering events. If elected, this alternative allows the reporting entity to perform its goodwill trigging event assessment only as of the end of each reporting period.
In accordance with ASC 350-20-50-3B, a reporting entity that elects the accounting alternative for a goodwill impairment triggering event evaluation should disclose the alternative as a significant accounting policy in the footnotes to the financial statements in accordance with ASC 235-10-50-1. Other than the accounting policy disclosure, a reporting entity is not required to make incremental disclosures related to this accounting alternative.

8.10.3 Goodwill amortization (private companies)

ASC 350 allows eligible private companies to amortize goodwill and apply a one-step impairment model. If elected, ASC 350 requires certain disclosures, which differ from those discussed in FSP 8.9.
The private company alternative in ASC 350 requires the aggregate amount of goodwill, net of accumulated amortization and impairment, to be presented as a separate line item on the balance sheet. The amortization and aggregate amount of impairment of goodwill is required to be presented on the income statement line items within continuing operations (or similar caption) unless the amortization or a goodwill impairment loss is associated with a discontinued operation. In that case, the amortization and impairment should be included (on a net-of-tax basis) within the results of discontinued operations.
For each period for which a balance sheet is presented, private companies are required to disclose in the footnotes (1) the amount assigned to goodwill in total and by major business combination or by reorganization event resulting in fresh-start reporting, and (2) the weighted-average amortization period in total and the amortization period by major business combination or by reorganization event resulting in fresh-start reporting. ASC 350-20-50-5 provides additional information that is required in each period for which a balance sheet is presented.

ASC 350-20-50-5

The following information shall be disclosed in the financial statements or the notes to the financial statements for each period for which a statement of financial position is presented:
  1. The gross carrying amounts of goodwill, accumulated amortization, and accumulated impairment loss
  2. The aggregate amortization expense for the period
  3. Goodwill included in a disposal group classified as held for sale in accordance with paragraph 360-10-45-9 and goodwill derecognized during the period without having previously been reported in a disposal group classified as held for sale.

ASC 820-10-50-2(bbb) requires quantitative disclosures about significant unobservable inputs used in fair value measurements categorized within Level 3 of the fair value hierarchy. These disclosures are not required for fair value measurements related to the financial accounting and reporting for goodwill after its initial recognition in a business combination.

8.10.3.1 Impairment loss (private companies)

For each goodwill impairment loss recognized, the following information should be disclosed in the footnotes that include the period in which the impairment loss is recognized:

Excerpt from ASC 350-20-50-6

  1. A description of the facts and circumstances leading to the impairment 
  2. The amount of the impairment loss and the method of determining the fair value of the entity or the reporting unit (whether based on prices of comparable businesses, a present value or other valuation technique, or a combination of those methods) 
  3. The caption in the income statement in which the impairment loss is included 
  4. The method of allocating the impairment loss to the individual amortizable units of goodwill.

This information should continue to be disclosed in the footnotes whenever the financial statements include the income statement for the period in which the impairment loss was recognized.

8.10.3.2 Intangible assets subsumed into goodwill (private companies)

ASC 805-20 provides private companies the option not to recognize separate from goodwill: (a) customer-related intangible assets (unless they are capable of being sold or licensed independent from other assets) and (b) noncompetition agreements. Instead, the value of these intangibles would be included as a part of goodwill. A private company that elects the guidance on intangibles must also adopt the goodwill accounting alternative (see FSP 8.10.3).
ASC 805-20 does not require any incremental disclosure requirements. However, it is important to note that any intangibles subsumed into goodwill by applying this guidance require qualitative disclosure in accordance with the following guidance:

Excerpt from ASC 805-30-50-1

Paragraph 805-10-50-1 identifies one of the objectives of disclosures about a business combination. To meet that objective, the acquirer shall disclose all of the following information for each business combination that occurs during the reporting period:
a. A qualitative description of the factors that make up the goodwill recognized, such as expected synergies from combining operations of the acquiree and the acquirer, intangible assets that do not qualify for separate recognition, or other factors.

Therefore, private companies must describe the nature of the intangible assets that are included in goodwill.

8.10.4 SEC requirements not applicable to private companies

Figure FSP 8-1 illustrates the presentation and disclosure requirements only required for SEC registrants.
Figure FSP 8-1
Presentation and disclosure requirements applicable only to SEC registrants
Description
Reference
Section
Separate disclosure of receivables that exceed 10% of aggregate receivables
S-X 5-02 3(b)
Disclosure of receivables mortgaged, pledged, or otherwise subject to lien
Separate disclosure of major classes of inventory
Disclosure of the excess of replacement or current cost over stated LIFO value
Separate disclosure of prepaid assets
Separate disclosure of other current assets that exceed 5% of total current assets
Separate disclosure of other noncurrent assets that exceed 5% of total assets
Separate presentation for each class of intangible assets that exceed 5% of total assets
S-X 5-02 (15)
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