Business combinations, and the related complex accounting issues that often arise from them, were thought to just be the domain of larger, often publicly traded companies. However, with smaller companies often having aggressive growth plans and with the wide scale availability of financing, business combinations are increasingly occurring at smaller and private companies.
Applying the accounting guidance in ASC 805, Business Combinations, can be very challenging, especially if an entity has limited experience in accounting for such transactions. Additionally, the FASB has issued several recent ASUs that have updated the guidance in this area. In this course, we will focus in reviewing the acquisition method of accounting for a business combination under ASC 805, including such topics as determining the acquirer in a transaction, identifying acquired assets and liabilities in a transaction accounted for under ASC 805, including goodwill and other acquired intangible assets, the accounting for employee compensation arrangements arising from such transactions and the subsequent accounting for the recorded assets and liabilities, including accounting, for impairment of such assets.
The goal of this course is to demystify the accounting around this often complex area of accounting.
- Determining the definition of a business and applicability of the asset acquisition vs. business combination ac-counting guidance
- Determining the acquirer in a business combination transaction
- Identifying acquired assets and liabilities in a business combination
- Application of fair value principles when measuring assets and liabilities
- Subsequent accounting for acquired assets and liabilities
- Recall the factors determining whether a transaction is an asset acquisition or a business combination
- Identify acquired assets and liabilities in a business combination transaction
- Apply fair value concepts from ASC 820 in accounting for acquired assets and liabilities
- Recall the subsequent accounting for such assets and liabilities, including asset impairment