The FASB Plans to Clean up Business Combination Accounting Rules

General Business

September 01, 2015
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The Financial Accounting Standards Board (FASB) is working on two projects to simplify and clarify the accounting rules that relate to business combinations, which may be good news for companies with future M&A aspirations. In May, the FASB continued its work on refining the definition of a business to help accountants distinguish between transactions that should be treated as acquisitions (or disposals) of assets and transactions that should be treated as acquisitions (or disposals) of businesses. The distinction is important because, if a business buys or acquires another business, it must follow FASB Accounting Standards Codification (ASC) Topic 805, Business Combinations.


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