NORWALK, Conn. -The Financial Accounting Standards Board on Wednesday considered ways to ease the blow of prohibiting merging companies from "pooling" their assets.

The agency's plan to eliminate the pooling-of-interests method of accounting for mergers has drawn fierce criticism, mainly because the alternative - purchase accounting - requires a combined company to write goodwill off over 20 years. (Goodwill is the difference between the price paid and the fair values of the assets and liabilities.) Critics have countered that goodwill should only be written off if there is evidence that its value has decreased.

At a meeting Wednesday, FASB officials considered four alternatives: amortizing goodwill; requiring an immediate write-off; recording goodwill but then testing to measure if its value has declined; and a "mixed model" that would require amortization over the goodwill's "useful life."

The FASB's staff recommended against requiring immediate write-offs and said amortization should be considered a last resort if attempts to measure goodwill's decline in value fail. BFASB's board members generally agreed and discussed how to test whether goodwill has declined, what the agency calls "testing for impairment."

"I am encouraged by what I heard today," said Donna Fisher, director of tax and accounting for the American Bankers Association. "If they repair the accounting for goodwill under purchase accounting, that will lessen the pain of losing pooling accounting."

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