On Oct. 7, the American Society of Appraisers (ASA) filed comments with the Financial Accounting Standards Board (FASB) in response to an “Invitation to Comment” on whether to change the subsequent accounting for goodwill and modify the recognition of intangible assets in a business combination, according to a post on the ASA website.

On the topic of goodwill and its treatment, FASB is considering an amortization-only model, an impairment-only model, and an amortization model combined with an impairment test for subsequent accounting of goodwill.

“ASA supports the current impairment-only model and opposes an amortization model for goodwill accounting,” according to the website. “Amortization of goodwill deprives investors of a tool they use to evaluate management performance in their acquisition decisions. Furthermore, an amortization model of goodwill treats company acquisition decisions with a fixed-life span instead of producing on-going results, which is counter to investor behavior.”

ASA wrote that it believes the current approach to valuing intangible assets in a business combination operates well. The current guidelines rightfully acknowledge that value is driven by intangible assets for many investors and entities, the appraisal organization stated.

The separate recognition of identifiable tangible assets between finite and indefinite lived assets is required to represent the actuality of an acquisition. For example, trademarks and consumer-related intangible assets (CRI) are often long-lived and valuable without a definitive lifespan.