business combination accounting checklist


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  • Standards

    • FASB Accounting Standards Codification

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    Navigation
    • Broad transactions

      • ASC 805 — Business Combinations

      • ASC 808 — Collaborative Arrangements

      • ASC 810 — Consolidation

      • ASC 815 — Derivatives and Hedging

      • ASC 820 — Fair Value Measurements and Disclosures

      • ASC 825 — Financial Instruments

      • ASC 830 — Foreign Currency Matters

      • ASC 835 — Interest

      • ASC 840 — Leases

      • ASC 842 — Leases

      • ASC 845 — Nonmonetary Transactions

      • ASC 850 — Related Party Disclosures

      • ASC 852 — Reorganizations

      • ASC 853 — Service Concession Arrangements

      • ASC 855 — Subsequent Events

      • ASC 860 — Transfers and Servicing


    Info

    ASC 805 — Business Combinations

    Overview

    The full text of ASC 805, Business Combinations can be found in the FASB Accounting Standards Codification (link to the FASB’s Web site; registration required). Also, the full text of the Codification and Deloitte-authored Q&As related to the Codification are available in the Deloitte Accounting Research Tool (DART) Web site (subscription required).

    ASC 805 comprises six Subtopics (Overall; Identifiable Assets and Liabilities, and Any Noncontrolling Interest; Goodwill or Gain from Bargain Purchase, Including Consideration Transferred; Reverse Acquisitions; Related Issues; Income Taxes). Below is an overview of each Subtopic.

     

    805-10 Overall

    ASC 805-10 provides guidance on the acquisition method, specifically addressing the following:

     

    1. Whether a particular transaction or event is a business combination
    2. The identification of the acquirer and the acquisition date
    3. The period of time that an acquirer has to adjust provisional amounts, referred to as the measurement period
    4. The determination of what is part of a business combination transaction.

    805-20 Identifiable Assets and Liabilities, and Any Noncontrolling Interest

    ASC 805-20 provides further guidance on the acquisition method, specifically discussing the recognition and measurement of the following:

     

    1. Identifiable assets acquired
    2. Liabilities assumed
    3. Noncontrolling interests, if any, in the acquiree.

    805-30 Goodwill or Gain from Bargain Purchase, Including Consideration Transferred

    ASC 805-30 provides guidance on the acquisition method, specifically related to the “recognition and measurement of either goodwill or a gain from a bargain purchase.”

     

    805-40 Reverse Acquisitions

    ASC 805-40 provides additional guidance on the “application of the acquisition method to a business combination that is a reverse acquisition.”

     

    805-50 Related Issues

    ASC 805-50 notes that it “provides guidance on the accounting and reporting for two transactions that have certain characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations [acquisition of assets rather than a business and transactions between entities under common control], and on another issue that arises after a business combination [new basis of accounting (pushdown)].”

     

    805-740 Income Taxes

    ASC 805-740 notes the following:

     

    This Subtopic provides incremental guidance on accounting for income taxes related to business combinations and to acquisitions by not-for-profit entities. This Subtopic requires recognition of deferred tax liabilities and deferred tax assets (and related valuation allowances, if necessary) for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination or in an acquisition by a not-for-profit entity.

    The recognition and measurement requirements related to accounting for income taxes in this Subtopic are exceptions to the recognition and measurement principles that are otherwise required for business combinations and acquisitions by not-for-profit entities, as established in Sections 805-20-25 and 805-20-30.

    Content from the FASB Accounting Standards Codification® included at http://www.usgaapplus.com is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.

    FASB Accounting Standards Updates

      The following ASUs amended the guidance in this Topic:

      • ASU 2018-09, Codification Improvements (issued July 2018).
      • ASU 2017-01, Clarifying the Definition of a Business (issued January 2017; Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.).
      • ASU 2016-03, Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810), Derivatives and Hedging (Topic 815): Effective Date and Transition Guidance — a consensus of the Private Company Council (issued March 2016; effective immediately).
      • ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (issued September 2015; effective December 15, 2015, for public entities).
      • ASU 2015-08, Business Combinations (Topic 805): Pushdown Accounting Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (issued May 8, 2015; effective immediately).
      • ASU 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination — a consensus of the Private Company Council (issued December 23, 2014; effective December 15, 2015).
      • ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting — a consensus of the FASB Emerging Issues Task Force (issued November 2014; effective November 18, 2014).
      • ASU 2014-09, Revenue From Contracts With Customers (issued May 2014; effective December 15, 2016, for public entities).
      • ASU 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment Upon Derecognition of Certain Subsidiaries or Groups of Assets Within a Foreign Entity or of an Investment in a Foreign Entity — a consensus of the FASB Emerging Issues Task Force (issued March 2013; effective December 15, 2013, for public entities and December 15, 2014, for nonpublic entities).
      • ASU 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution — a consensus of the FASB Emerging Issues Task Force (issued October 2012; effective December 15, 2012).
      • ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (issued May 2011; effective December 15, 2011, for public entities and December 15, 2011, for nonpublic entities).
      • ASU 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations — consensus of the FASB Emerging Issues Task Force (issued December 2010; effective December 15, 2010).
      • ASU 2010-08, Technical Corrections to Various Topics (issued February 2010; effective February 2010).
      • ASU 2010-07, Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions (issued January 2010; effective December 15, 2009).
      • ASU 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification (issued January 2010; effective December 15, 2009).

      Proposed FASB Accounting Standards Updates

      No current proposed ASUs on Topic 805.

      Related resources

      See our comprehensive collection of news and publications related to business combinations.

      International guidance

      For the IASB’s guidance on this topic, see IFRS 3 , Business Combinations.

      Quick links

      • Collection of business combinations news and publications

      • IFRS 3 — Business Combinations

      • Deloitte Accounting Research Tool

      Related news

      • FASB makes technical corrections and improvements to Codification

        Jul 17, 2018

      • Highlights of the FASB’s June 27 meeting

        Jun 29, 2018

      • FASB discusses improvements to the accounting for asset acquisitions and business combinations

        May 10, 2018

      • FASB clarifies the definition of a business

        Jan 05, 2017

      • Highlights from the FASB’s November 9 meeting

        Nov 11, 2016

      • Highlights from the FASB’s October 10 meeting

        Oct 12, 2016

      • All Related

      Related Publications

      • sec bus combo Image

      • A Roadmap to SEC Reporting Considerations for Business Combinations

        Jul 09, 2018

      • Insurance — Accounting and financial reporting update (2017) Image

      • Insurance — Accounting and Financial Reporting Update (2017)

        Jan 24, 2018

      • Real Estate & Construction — Accounting and Financial Reporting Update Image

      • Real Estate & Construction — Accounting and Financial Reporting Update (2017)

        Dec 22, 2017

      • A roadmap to accounting for asset acquisitions Image

      • A Roadmap to Accounting for Asset Acquisitions

        Oct 25, 2017

    • All Related


    • Related Standards

      • ASC 740 — Income Taxes

      • All Related


      Related Projects

      • Accounting for measurement period adjustments in a business combination

      • All Related


      • About
      • Contact us
      • Legal
      • Privacy

      Material on this website is © 2017 Deloitte Global Services Limited, or a member firm of Deloitte Touche Tohmatsu Limited, or one of their related entities. See Legal for additional copyright and other legal information.

      Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

      Correction list for hyphenation

      These words serve as exceptions. Once entered, they are only
      hyphenated at the specified hyphenation points.
      Each word should be on a separate line.



      This site uses cookies to provide you with a more responsive and personalised service.
      By using this site you agree to our use of cookies.
      Please read our cookie notice for more information
      on the cookies we use and how to delete or block them.

      The full functionality of our site is not supported on your browser version, or you may have ‘compatibility mode’ selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

      IAS plus

      IAS plus

      United States (English)

      • Global (English)

      • Global (Deutsch)

      • Canada (English)

      • Canada (Français)

      • United Kingdom (English)

      • United States (English)

      Login or Register

      Welcome

      • My account

      • Logout

      IAS plus

      United States (English)

      • Global (English)

      • Global (Deutsch)

      • Canada (English)

      • Canada (Français)

      • United Kingdom (English)

      • United States (English)

      • Home

      • News

      • Publications

      • Standards

      • Projects

      • Resources

      • My US GAAP Plus

        • Topics

        • Communications


      Navigation
      • Standards

        • FASB Accounting Standards Codification

          • Assets

          • Broad transactions

            • Equity

            • Expenses

            • General principles

            • Industry

            • Liabilities

            • Presentation

            • Revenue

          • International

          • Key Differences Between U.S. GAAP and IFRSs



        Navigation
        • Broad transactions

          • ASC 805 — Business Combinations

          • ASC 808 — Collaborative Arrangements

          • ASC 810 — Consolidation

          • ASC 815 — Derivatives and Hedging

          • ASC 820 — Fair Value Measurements and Disclosures

          • ASC 825 — Financial Instruments

          • ASC 830 — Foreign Currency Matters

          • ASC 835 — Interest

          • ASC 840 — Leases

          • ASC 842 — Leases

          • ASC 845 — Nonmonetary Transactions

          • ASC 850 — Related Party Disclosures

          • ASC 852 — Reorganizations

          • ASC 853 — Service Concession Arrangements

          • ASC 855 — Subsequent Events

          • ASC 860 — Transfers and Servicing


        Info

        ASC 805 — Business Combinations

        Overview

        The full text of ASC 805, Business Combinations can be found in the FASB Accounting Standards Codification (link to the FASB’s Web site; registration required). Also, the full text of the Codification and Deloitte-authored Q&As related to the Codification are available in the Deloitte Accounting Research Tool (DART) Web site (subscription required).

        ASC 805 comprises six Subtopics (Overall; Identifiable Assets and Liabilities, and Any Noncontrolling Interest; Goodwill or Gain from Bargain Purchase, Including Consideration Transferred; Reverse Acquisitions; Related Issues; Income Taxes). Below is an overview of each Subtopic.

         

        805-10 Overall

        ASC 805-10 provides guidance on the acquisition method, specifically addressing the following:

         

        1. Whether a particular transaction or event is a business combination
        2. The identification of the acquirer and the acquisition date
        3. The period of time that an acquirer has to adjust provisional amounts, referred to as the measurement period
        4. The determination of what is part of a business combination transaction.

        805-20 Identifiable Assets and Liabilities, and Any Noncontrolling Interest

        ASC 805-20 provides further guidance on the acquisition method, specifically discussing the recognition and measurement of the following:

         

        1. Identifiable assets acquired
        2. Liabilities assumed
        3. Noncontrolling interests, if any, in the acquiree.

        805-30 Goodwill or Gain from Bargain Purchase, Including Consideration Transferred

        ASC 805-30 provides guidance on the acquisition method, specifically related to the “recognition and measurement of either goodwill or a gain from a bargain purchase.”

         

        805-40 Reverse Acquisitions

        ASC 805-40 provides additional guidance on the “application of the acquisition method to a business combination that is a reverse acquisition.”

         

        805-50 Related Issues

        ASC 805-50 notes that it “provides guidance on the accounting and reporting for two transactions that have certain characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations [acquisition of assets rather than a business and transactions between entities under common control], and on another issue that arises after a business combination [new basis of accounting (pushdown)].”

         

        805-740 Income Taxes

        ASC 805-740 notes the following:

         

        This Subtopic provides incremental guidance on accounting for income taxes related to business combinations and to acquisitions by not-for-profit entities. This Subtopic requires recognition of deferred tax liabilities and deferred tax assets (and related valuation allowances, if necessary) for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination or in an acquisition by a not-for-profit entity.

        The recognition and measurement requirements related to accounting for income taxes in this Subtopic are exceptions to the recognition and measurement principles that are otherwise required for business combinations and acquisitions by not-for-profit entities, as established in Sections 805-20-25 and 805-20-30.

        Content from the FASB Accounting Standards Codification® included at http://www.usgaapplus.com is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.

        FASB Accounting Standards Updates

          The following ASUs amended the guidance in this Topic:

          • ASU 2018-09, Codification Improvements (issued July 2018).
          • ASU 2017-01, Clarifying the Definition of a Business (issued January 2017; Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.).
          • ASU 2016-03, Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810), Derivatives and Hedging (Topic 815): Effective Date and Transition Guidance — a consensus of the Private Company Council (issued March 2016; effective immediately).
          • ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (issued September 2015; effective December 15, 2015, for public entities).
          • ASU 2015-08, Business Combinations (Topic 805): Pushdown Accounting Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (issued May 8, 2015; effective immediately).
          • ASU 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination — a consensus of the Private Company Council (issued December 23, 2014; effective December 15, 2015).
          • ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting — a consensus of the FASB Emerging Issues Task Force (issued November 2014; effective November 18, 2014).
          • ASU 2014-09, Revenue From Contracts With Customers (issued May 2014; effective December 15, 2016, for public entities).
          • ASU 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment Upon Derecognition of Certain Subsidiaries or Groups of Assets Within a Foreign Entity or of an Investment in a Foreign Entity — a consensus of the FASB Emerging Issues Task Force (issued March 2013; effective December 15, 2013, for public entities and December 15, 2014, for nonpublic entities).
          • ASU 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution — a consensus of the FASB Emerging Issues Task Force (issued October 2012; effective December 15, 2012).
          • ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (issued May 2011; effective December 15, 2011, for public entities and December 15, 2011, for nonpublic entities).
          • ASU 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations — consensus of the FASB Emerging Issues Task Force (issued December 2010; effective December 15, 2010).
          • ASU 2010-08, Technical Corrections to Various Topics (issued February 2010; effective February 2010).
          • ASU 2010-07, Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions (issued January 2010; effective December 15, 2009).
          • ASU 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification (issued January 2010; effective December 15, 2009).

          Proposed FASB Accounting Standards Updates

          No current proposed ASUs on Topic 805.

          Related resources

          See our comprehensive collection of news and publications related to business combinations.

          International guidance

          For the IASB’s guidance on this topic, see IFRS 3 , Business Combinations.

          Quick links

          • Collection of business combinations news and publications

          • IFRS 3 — Business Combinations

          • Deloitte Accounting Research Tool

          Related news

          • FASB makes technical corrections and improvements to Codification

            Jul 17, 2018

          • Highlights of the FASB’s June 27 meeting

            Jun 29, 2018

          • FASB discusses improvements to the accounting for asset acquisitions and business combinations

            May 10, 2018

          • FASB clarifies the definition of a business

            Jan 05, 2017

          • Highlights from the FASB’s November 9 meeting

            Nov 11, 2016

          • Highlights from the FASB’s October 10 meeting

            Oct 12, 2016

          • All Related

          Related Publications

          • sec bus combo Image

          • A Roadmap to SEC Reporting Considerations for Business Combinations

            Jul 09, 2018

          • Insurance — Accounting and financial reporting update (2017) Image

          • Insurance — Accounting and Financial Reporting Update (2017)

            Jan 24, 2018

          • Real Estate & Construction — Accounting and Financial Reporting Update Image

          • Real Estate & Construction — Accounting and Financial Reporting Update (2017)

            Dec 22, 2017

          • A roadmap to accounting for asset acquisitions Image

          • A Roadmap to Accounting for Asset Acquisitions

            Oct 25, 2017

        • All Related


        • Related Standards

          • ASC 740 — Income Taxes

          • All Related


          Related Projects

          • Accounting for measurement period adjustments in a business combination

          • All Related


          • About
          • Contact us
          • Legal
          • Privacy

          Material on this website is © 2017 Deloitte Global Services Limited, or a member firm of Deloitte Touche Tohmatsu Limited, or one of their related entities. See Legal for additional copyright and other legal information.

          Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

          Correction list for hyphenation

          These words serve as exceptions. Once entered, they are only
          hyphenated at the specified hyphenation points.
          Each word should be on a separate line.


          August 4, 2018

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