The accounting treatment of goodwill: When will FASB stop changing the rules?

The accounting treatment of goodwill is one of the most researched accounting issues. Throughout the history of generally accepted accounting principles (GAAP), the accounting rules related to goodwill have changed many times. This qualitative research paper analyzed the authoritative accounting literature to determine how and why the accounting treatment of goodwill has changed so often. From ARB 24 published in 1944 to the Accounting Standards Updateapproved in August 2011, goodwill passed from being a wasting asset be amortized to an asset to be annually tested for impairment. The study found that the accounting treatment of goodwill has been constantly changing due to the complexity, controversies, and costs of testing goodwill for impairment. Despite the recent Accounting Standards Update, the accounting treatment for goodwill will continue to change.