In Brief – AcSB’s Exposure Draft, “Relief from Recognition of Acquired Intangible Assets and Amortization of Goodwill”

Project Summary

Project Objectives

The AcSB proposes amendments to Section 1582, Business Combinations, and Section 3064, Goodwill and Intangible Assets.

The proposals aim to simplify financial reporting for private enterprises and impacted not-for-profit organizations by:

• providing optional relief from recognizing identifiable intangible assets acquired in a business combination; and
• introducing an accounting policy choice to amortize goodwill.

Current Stage

The AcSB is seeking feedback on its

Next Steps

Your feedback on the Exposure Draft will inform the final amendments.

How to Provide Feedback

Keep an eye on our Subsequent Measurement of Goodwill and Acquired Intangible Assets project page for updates, key dates, and registration information. We want to hear from you!

• Submit a response letter via our online form.
• Attend a roundtable. Registration details coming soon via our Subsequent Measurement of Goodwill and Acquired Intangible Assets project page

Why Did We Undertake This Project?

Feedback from interested and affected parties highlighted challenges with current standards:

• Complexity: Estimating the fair value of intangible assets and performing goodwill impairment tests is costly and burdensome, especially for smaller entities.
• Limited usefulness: Users often find limited information value in separately recognized intangible assets and their fair value.

In March 2024, the AcSB approved a project to address these concerns. It included extensive outreach with over 160 interested and affected parties across Canada to inform the development of the proposals included in this Exposure Draft.

What Are the Key Proposals?

The Exposure Draft includes two key proposals.

Relief from recognition of identifiable intangible assets acquired in a business combination (relief).

• This provides an accounting policy choice to elect the relief, which must be applied consistently across all business combinations.
• Entities electing the relief are required to amortize their goodwill.
• This applies to all intangible assets acquired in a business combination.
• This requires disclosure of qualitatively significant intangible assets subsumed into goodwill that are readily identifiable. These disclosures are only required in the year of the business combination.

Subsequent measurement of goodwill (goodwill amortization)

• Entities that separately recognize identifiable intangible assets at fair value (i.e., entities that do not elect the accounting policy to apply the relief) may choose to amortize goodwill as an accounting policy.
• The policy choice must be applied consistently to all business combinations.
• For entities amortizing goodwill, goodwill is amortized on a straight-line basis over a default period of five years, unless the entity can demonstrate that a different useful life, not exceeding 10 years, is more appropriate.

When are the proposals effective?

The proposals would apply to annual financial statements relating to fiscal years beginning on or after January 1, 2029, with early application permitted.

Transition

Retrospective application is required, with simplified options available for certain voluntary changes in accounting policy.

Will the proposals result in a change in accounting?

If the following accounting policy choices are elected, a change in accounting will occur:

• Entities electing the relief will no longer separately recognize intangible assets and must amortize goodwill.
• Entities choosing to amortize goodwill without electing the relief will also see changes in how goodwill is subsequently measured and disclosed.

We Want Your Feedback!

Get involved and share your views by our comment deadline, January 31, 2026.

How can I comment on the proposals?

You can share your views the following ways:

• Submitting a response letter via our online form.
• Attending a roundtable. Session dates and registration details will be posted on the project page.

Stay informed

Visit the project page to stay up to date.

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