In the quiet meeting before the storm, the Financial Accounting Standards Board tidied up a few loose ends in its business combinations project before getting down to the contentious business on Feb. 3 of how to account for purchased intangible assets.

The board clarified some points on when to review goodwill impairment indicators after a company has acquired another company. It said that if there are certain indicators that goodwill is potentially impaired at the date of acquisition, it should be reviewed no later than two years after acquisition and only if more than one indicator is present at acquisition.

Other issues included the question of whether an impairment indicator is specific to an individual asset group to which goodwill can be allocated, and should the goodwill other than that allocable to the specific asset group be reviewed for impairment? The board decided it should not.

The board also decided that an impairment indicator specific to goodwill that can be allocated to individual asset groups should be reviewed for impairment at the individual level. That approach is sort of a "bottom up" approach, rather than the "top down" approach, which requires that the goodwill be reviewed at the aggregate asset-group level. The board continued with the bottom up approach, deciding that review should begin with individual asset groups if an impairment indicator is specific to goodwill and to an individual asset group.

The board added that there is no need to review at the aggregate asset level if all goodwill can be allocated to individual asset groups.