FASB Completes Decisions on Business Combinations Project; Prepares for Drafting of Two Final Statements.

• Position: Brief Article

Concluding months of redeliberations on all the substantive issues raised by constituents in connection with its 1999 proposal on Business Combinations and Intangible Assets, the Financial Accounting Standards Board unanimously supported the issuance of final statements on business combinations and on goodwill and intangible assets. At press time, it was expected that both statements were to be voted on in late June.

The final Statement on Business Combinations (which replaces APB Opinion No. 16) will provide guidance on the accounting for a business combination at the date a business combination is completed. It will change the accounting for business combinations in the following important ways:

* The statement requires use of the purchase method of accounting for all business combinations initiated after June 30, 2001, thereby eliminating use of the pooling-of-interests method.

* It provides new criteria that determine whether an acquired intangible asset should be recognized...