U.S. GAAP Codification Accounting Standards, ASC

Financial Accounting Review

Principles of AccountingAccounting by Topic Accounting Terms Dictionary

Section 9100: Business Combinations

[U.S. GAAP Codification Topic]
805 Business combinations
805-10 Overall
805-20 Identifiable assets and liabilities and any noncontrolling interest
805-30 Goodwill or gain from bargain purchase, including consideration transferred
805-40 Reverse acquisitions
805-50 Related issues
805-740 Income taxes

[U.S. GAAP before the Codification]
SFAS 141, June 2001, Business Combinations
SFAS 141(R), December 2007, Business Combinations, Revised SFAS 141
FSP FAS 141(R)-1, April 2009, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies

1. Acquisition method is applied for business combinations.

2. Steps of acquisition method:
(1) Acquirer
(2) Acquisition date
(3)Assets, liabilities, noncontrolling interest
(4) Goodwill

3. One entity should be identified as the acuquirer.

4. The acquirer obtains control at the acquisition date.

5. Recognition principle
The following are recognized at the acquisition date:
(1) Assets
(2) Liabilities
(3) Noncontrolling interest
(4) Goodwill

6. Measurement principle
The following are measured at the acquisition-date fair values:
(1) Assets
(2) Liabilities
(3) Noncontrolling interest

7. Exceptions to Recognition and Measurement Principles
(1) Assets and liabilities arising from contingencies
(2) Income taxes
(3) Employee benefits
(4) Indemnification assets

8. Exceptions to the Measurement Principle
(1) Reacquired assets
(2) Share-based payment awards
(3) Assets held for sale

9. Goodwill or a gain from bargain purchase
(1) Goodwill = Consideration transferred + FV of NCI - FV of Net Assets
(2) Gain from bargain purchase
= FV of Net Assets - Considerations transferred - FV of NCI
FV: Fair Value
NCI: Noncontrolling Interest

10. Consideration transferred
(1) Consideration transferred is measured at fair value
(2) Contingent consideration is measured at the acquisition-date fair value

11. Share-based payment awards exchanged for acquiree's employees
(1) Modification of share-based payment awards under SFAS 123R

12. Business combinations achieved in stages
(1) Previously held equity interest is remeasured at the acquisition-date fair value
(2) Changes in fair value are recognized in earnings as gains or losses

13. Business combinations achieved by contract alone
(1) Business combinations achieved without the transfer of consideration
(2) Rules of acquisition method are applied
--> even if all equity interests are allocated to NCI

14. Acquisition-related costs are recognized as expenses
(1) One exception: issuance costs of debt or equity securities
--> apply related GAAP

Index of U.S. GAAP Financial Accounting Review

U.S. GAAP by Codification Topics 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales

 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

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