In an exposure draft (ED) issued last year, the FASB and IASB proposed a new lease accounting model that would have significantly changed current practice. Later redeliberations of the Boards led to tentative decisions that substantially revised the proposed model, and as a result, the ED will be reexposed for public comment, which is expected in early 2012. The effective date of a final lease … [Read more...]

FASB recently issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment, which amends the guidance in ASC 350-20. Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine that the fair … [Read more...]

Some firms with negative equity were concluding no impairment test was indicated because fair value could never be less than zero. So long as fair value is greater than book value, their reporting units were passing the Step 1 goodwill impairment test – or so they reasoned. … [Read more...]

On January 4, 2011, in Uniloc vs. Microsoft case, the United States Court of Appeals for the Federal Circuit allowed for a new trial on damages. The court found that “the jury’s damages award was fundamentally tainted by the use of a legally inadequate methodology”. The court, in effect, rejected the “25% Rule of Thumb” for calculating the reasonable royalty rate in patent infringement … [Read more...]

The AICPA is proposing to revise the way in which cheap stock is measured. (Cheap stock is the term often used to describe the shares (usually common stock) issued to management and board members as incentive compensation through stock options and restricted share grants.) … [Read more...]