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FASB clarifies the definition of a business

  • FASB (US Financial Accounting Standards Board) Image

Jan 05, 2017

The FASB has issued ASU 2017-01, “Clarifying the Definition of a Business,” which provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The ASU amends ASC 805 to “provide a more robust framework to use in determining when a set of assets and activities is a business.” In addition, the amendments “provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable.”

For more information, see the press release, ASU, and FASB in Focus newsletter on the FASB’s Web site.

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