Research Paper on:
SFAS 141 Overview

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Like many statements and standards, the root of these two standards has come entirely out of the effort of the FASB to encourage corporations to be more honest about what  they are buying and the fair value of their assets, so that investors dont lose money because of misunderstanding. Although these statements were issued prior to the Enron debacle of  late 2001, its likely that the SFAS 141 could have perhaps helped avert some of the problems that occurred. However, while the  best intentions are linked with SFAS 141, the statement is causing problems for a variety of companies - not the least of them is change of methods in such a  short amount of time. This paper will note some of the other challenges that experts have found in using the SFAS 141. An overview of 141  The Financial Accounting Standards Board (FASB) enacted the "business combinations" statement - along with the "Goodwill and Other Intangible Statements" during the middle of 2001 (Davidson,  2002). In a nutshell, what SFAS 141 says is that mergers and acquisitions, also known as "business combinations" should be treated as one purchase in order to eliminate pooling of  interests accounting (Davidson, 2002). Accounting for business combinations needs to be limited solely to purchase method and required goodwill (Bukics and Champan, 2002). In the meantime, all forms of intangibles  need to be tested for impairment rather than amortized (Bukics and Champan, 2002). As the business combination accounting rules went into effect June 30, 2001, calendar-year reporting companies were stopped  from amortizing goodwill from prior transactions, beginning in 2002 (Davidson, 2002; see also DeMark, 2002). It was believed by members of the FASB board, that using the purchase method to