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B2 Option

Today the Private Company Council approved an accounting alternative related to recognition of intangibles in a business combination. Frazier & Deeter Partner Sean Lager provides an update.

On September 16, 2014, the Private Company Council approved an accounting alternative related to recognition of intangibles in a business combination which has been referred to as the “B2 Option” in its deliberations.

If approved by the Financial Accounting Standards Board, a nonpublic entity will have the option to adopt B2 as an accounting alternative which would provide nonpublic companies an option to subsume non-compete arrangements and customer-related intangibles, that are not capable of being licensed or sold independently, into goodwill.

We expect this to be approved by the FASB and issued by the end of the year, with early implementation allowed.

If you have questions about the implications of this change, or other accounting standards, please contact Frazier & Deeter.

This accounting update provided by Sean Lager, Partner in Frazier & Deeter’s Assurance practice. Sean is a member of the Technical Issues Committee of the American Institute of Certified Public Accountants. The Technical Issues Committee works with the Financial Accounting Standards Board, Auditing Standards Board and Governmental Accounting Standards Board to represent the views of accounting firms and their clients in the standards-setting process.

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