Transitional Statements


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Accounting for Prior Purchases (Transitional Restatements)

Restate intangible assets currently on the books to meet the new recognition criteria.
Analyze useful life of intangible assets to determine those with finite lives and those with indefinite lives.

Transitional Impairment Tests

Intangible assets with indefinite lives and goodwill will be initially tested for impairment at the beginning of the fiscal year.
Reporting units are identified and all assets (tangible, intangible, and goodwill) are allocated among them.

Timing of Transitional Impairment Tests

The transitional intangible asset impairment test will be completed in the first interim period.
The first step of the goodwill impairment test completed in 6 months and the second step completed ASAP, but no later than 1 year.

Income Statement Treatment of Transitional Impairment

Any impairment identified during the transitional period are to be accounted for as a change in accounting principals.

Ongoing Implementation Testing Results

Reconsider amortization of each intangible asset including its remaining useful life.
Reclassify any intangible assets as necessary.
Perform impairment tests as necessary.

See Paragraph(s) 48 - 58 of SFAS 142.