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FASB proposes to clarify the definition of a business

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

Nov 23, 2015

On November 23, 2015, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update, “Clarifying the Definition of a Business,” which is intended to help entities evaluate whether to account for transactions as acquisitions (or disposals) of assets or as businesses.

As stated in the FASB’s press release, the proposal would provide a “more robust framework for determining when a set of assets and activities is a business. The framework would provide more consistency in the application of the guidance, reduce the costs of its application, and make the definition of a business more operable.”

Comments on the proposal are due by January 22, 2016, For more information, see the press release, FASB in Focus newsletter, and the proposed ASU on the FASB’s Web site.

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