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FASB issues revised business combinations standard

  • FASB (old) Image

05 Dec 2007

The US Financial Accounting Standards Board has issued a revised standard on business combinations and a new standard on noncontrolling interests ('minority intrests').

The standards are effective for financial years beginning after 15 December 2008. The IASB plans to issue its counterpart standards IFRS 3 (revised) Business Combinations and IAS 27 (as revised in 2007) Consolidated and Separate Financial Statements, early next year. The FASB standard on business combinations requires the acquiring entity to recognise all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed (including goodwill); and requires the acquirer to disclose information that helps in evaluating and understanding the nature and financial effect of the business combination. The IASB's revised IFRS 3 will permit, but not require, recognition of the full goodwill of the acquired entity. Click for FASB's News Release (PDF 58k). The new standards (SFAS 141(R) and SFAS 160) may be downloaded without charge from the FASB Website.

 

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