But now in the fourth quarter, FASB not only fumbles the ball, but also it refuses to tackle the opponents. It's as if they think the objective of the game has changed to see who can score fewer points. (Football metaphors reign when you write around New Year's Day.)

In December FASB announced that it would allow corporations to apply a test of impairment for goodwill write-downs. The board might as well have said it doesn't care whether the firms ever again write down goodwill. This foolish proposal means that investors will have to spend time and resources estimating the truth about goodwill, and then adjusting the reported figures accordingly.

I realize that FASB runs the risk of a David-and-Goliath battle with Congress, but sometimes battles are important enough for individuals to take a stand and fight. If FASB capitulates on this issue, I don't see the point in its continued existence. Let the managers invent any accounting fictions that they want. Frankly, I would rather see a crusade against Congress over this accounting truth. If members of Congress are so pickled with campaign contributions that they cannot see reality, let their souls be damned.

The difficulty with an impairment test is very simple. Nobody -- I mean absolutely nobody -- can value goodwill with any precision. To be sure, investment bankers, accountants, and others will, for an appropriate fee, measure goodwill. But they might as well gaze into crystal balls as perform any test, for goodwill cannot be separately sold. With no market for goodwill, it's your guess against mine about its value.

With a surfeit of ambiguity, managers will choose several "reliable" sources to measure goodwill for them. In this context, "reliable", of course, refers to professionals who will reliably provide answers managers want; I'm talking about reliable measurers rather than reliable measurements. In this case, managers can make reasonably sure that goodwill is not impaired. Auditors, meanwhile, will only have these flimsy data to work with. They likely will have to accept whatever managers propose.

Unless the economy really tanks or corporate managers desire to take a really big bath, firms are not going to report any impairment of goodwill. They will argue that goodwill stays the same or it increases in value.

If this decision stands, I'll bet that the first year under an impairment test for goodwill Fortune 500 corporations will report less than 10 percent of the goodwill expense that they report during the previous year. No wonder CEOs and CFOs drank a toast to this proposal.

Let's hope that FASB regains a sense of its mission and serves the investment community by retracting this foolish decision.

More by J. Edward Ketz