What change does FASB ASC 805 make regarding identifiable intangible assets in a business combination for private companies?

FASB ASC 805 introduces significant changes in how private companies recognize identifiable intangible assets during a business combination. One of the key aspects of this guidance is that it allows private companies to recognize fewer intangible assets as separate from goodwill. This adjustment simplifies the accounting process for these entities by creating a streamlined approach to recognition and measurement, allowing them to amalgamate more intangible assets into goodwill rather than reporting them separately. This change is beneficial for private companies, which may not have the same resources as larger public companies to track and value various intangible assets comprehensively.

The other potential choices reflect aspects that are not part of the changes brought about by FASB ASC 805 concerning identifiable intangible assets for private companies. For example, the requirement to recognize all intangible assets separately would be contrary to the concessions provided to smaller entities under this guidance. Additionally, the mandate for additional disclosures about goodwill and the elimination of impairment testing do not align with the key provisions pertaining to the treatment of identifiable intangible assets in business combinations for private companies as specified by ASC 805.