Prospectus
Accounting Principles Board Opinion (APBO) No. 17 defines goodwill as “the excess of the cost of an acquired company over the sum of identifiable net assets.” Accounting for goodwill creates a problem because of its lack of physical substance, its difficulty in estimating value, and its undeterminable useful life. Formerly, goodwill was capitalized and amortized over a period of not more than forty years. In hindsight, financial statement users, company management, analysts, and many more, realized that goodwill was more than just a “wasting asset” (i.e. an asset with a finite life). They realized that intangible assets, such as goodwill, have significant and financially viable purposes for many entities. Accounting for goodwill and other intangible assets under existing standards came under question, and many financial statement users believed there was need for new and improved reporting criteria for intangible assets. To satisfy the concerns of financial statement users, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.