Wiley GAAP 2019

48ASC 805 BUSINESS COMBINATIONS

PERSPECTIVE AND ISSUES

Subtopics

ASC 805, Business Combinations, consists of six subtopics:

• ASC 805-10, Overall, which provides guidance on transactions accounted for under the acquisition method
• ASC 852-20, Identifiable Assets and Liabilities, and Any Noncontrolling Interest, which deals with specific aspects of the acquisition method
• ASC 805-30, Goodwill or Gain from Bargain Purchase, Including Consideration Transferred, which, like ASC 805-20, deals with specific aspects of the acquisition method
• ASC 805-40, Reverse Acquisitions, which provides guidance on business combinations that are reverse acquisitions
• ASC 805-50, Related Issues, which offers guidance on two items that are similar, but not the same, as a business combination: acquisition of assets and transactions between entities under common control
• ASC 805-740, Income Taxes, which provides “incremental guidance” on business combinations and on acquisitions by a not-for-profit entity

Technical Alert

ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Many stakeholders have been concerned that the Codification’s definition of a business resulted in transactions that were in substance asset acquisitions being accounted for as businesses. This primarily resulted from a broad interpretation of the provision that if market participants could replace the missing inputs and processes necessary to create an output, the acquisition was a business. ...