{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/740/805/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"740","topic_title":"Income Taxes","subtopic":"740-805","subtopic_title":"Business Combinations","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"740-805-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Section provides general guidance on the recognition of deferred tax assets and liabilities in connection with a <a href=\"/glossary/b/#business-combination\" class=\"term\" title=\"A transaction or other event in which an acquirer obtains control of one or more businesses. Transactions sometimes referred to as true mergers or mergers of equals also are business combinations. See also Acquisition by a Not-for-Profit Entity.\"><span>business combination</span></a>. It also addresses certain business-combination-specific matters relating to <a href=\"/glossary/g/#goodwill\" class=\"term\" title=\"An asset representing the future economic benefits arising from other assets acquired in a business combination, acquired in an acquisition by a not-for-profit entity, or recognized by a joint venture upon formation that are not individually identified and separately recognized. For ease of reference, this term also includes the immediate charge recognized by not-for-profit entities in accordance with paragraph 958-805-25-29.\"><span>goodwill</span></a>, replacement awards, and the allocation of consolidated tax expense after an acquisition.</div> </div>","snippet":"This Section provides general guidance on the recognition of deferred tax assets and liabilities in connection with a business combination. It also addresses certain business-combination-specific matters relating to good…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e2b84e4249380682298834d816e0a5f3942f1bb9f4da8e0fdc2af4be70084558","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4DC82-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An <a href=\"/glossary/a/#acquirer\" class=\"term\" title=\"The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer.\"><span>acquirer</span></a> shall recognize a <a href=\"/glossary/d/#deferred-tax-asset\" class=\"term\" title=\"The deferred tax consequences attributable to deductible temporary differences and carryforwards. A deferred tax asset is measured using the applicable enacted tax rate and provisions of the enacted tax law. A deferred tax asset is reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.\"><span>deferred tax asset</span></a> or <a href=\"/glossary/d/#deferred-tax-liability\" class=\"term\" title=\"The deferred tax consequences attributable to taxable temporary differences. A deferred tax liability is measured using the applicable enacted tax rate and provisions of the enacted tax law.\"><span>deferred tax liability</span></a> arising from the assets acquired and liabilities assumed in a business combination </span></span> <span class=\"sfragment\" id=\"sfr_7FF4DDDA-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">and shall account for the potential tax effects of <a href=\"/glossary/t/#temporary-difference\" class=\"term\" title=\"A difference between the tax basis of an asset or liability computed pursuant to the requirements in Subtopic 740-10 for tax positions, and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively. Paragraph 740-10-25-20 cites examples of temporary differences. Some temporary differences cannot be identified with a particular asset or liability for financial reporting (see paragraphs 740-10-05-10 and 740-10-25-24740-10-25-25), but those temporary differences do meet both of the following conditions: Result from events that have been recognized in the financial statements Will result in taxable or deductible amounts in future years based on provisions of the tax law. Some events recognized in financial statements do not have tax consequences. Certain revenues are exempt from taxation and certain expenses are not deductible. Events that do not have tax consequences do not give rise to temporary differences.\"><span>temporary differences</span></a>, <a href=\"/glossary/c/#carryforwards\" class=\"term\" title=\"Deductions or credits that cannot be utilized on the tax return during a year that may be carried forward to reduce taxable income or taxes payable in a future year. An operating loss carryforward is an excess of tax deductions over gross income in a year; a tax credit carryforward is the amount by which tax credits available for utilization exceed statutory limitations. Different tax jurisdictions have different rules about whether excess deductions or credits may be carried forward and the length of the carryforward period. The terms carryforward, operating loss carryforward, and tax credit carryforward refer to the amounts of those items, if any, reported in the tax return for the current year.\"><span>carryforwards</span></a>, and any income tax uncertainties of an <a href=\"/glossary/a/#acquiree\" class=\"term\" title=\"The business or businesses that the acquirer obtains control of in a business combination. This term also includes a nonprofit activity or business that a not-for-profit acquirer obtains control of in an acquisition by a not-for-profit entity.\"><span>acquiree</span></a> that exist at the <a href=\"/glossary/a/#acquisition-date\" class=\"term\" title=\"The date on which the acquirer obtains control of the acquiree.\"><span>acquisition date</span></a>, or that arise as a result of the acquisition, in accordance with the guidance in Subtopic <a altsource=\"GUID-3B0818A8-1B9D-4530-82D4-22D4284B582F.ditamap\" class=\"ditamap\">740-10</a> together with the incremental guidance provided in this Subtopic. </span></span> </div> </div>","snippet":"An acquirer shall recognize a deferred tax asset or deferred tax liability arising from the assets acquired and liabilities assumed in a business combination and shall account for the potential tax effects of temporary d…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3333cf322e92f1ae1f13723c94b70920009ec21e6e88ae9d6738dae00d90ecb5","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-3","para":"25-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4DF07-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As of the acquisition date, a deferred tax liability or asset shall be recognized for an acquired entity's taxable or <a href=\"/glossary/d/#deductible-temporary-difference\" class=\"term\" title=\"Temporary differences that result in deductible amounts in future years when the related asset or liability is recovered or settled, respectively. See Temporary Difference.\"><span>deductible temporary differences</span></a> or operating loss or tax credit carryforwards except for differences relating to the portion of goodwill for which amortization is not deductible for tax purposes, leveraged leases, and the specific acquired temporary differences identified in paragraph <a href=\"/asc/740/10/#740-10-25-3\" class=\"xref\">740-10-25-3(a)</a>. Taxable or deductible temporary differences arise from differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination. Example 1 (see paragraph <a href=\"/asc/740/805/#740-805-55-2\" class=\"xref\">805-740-55-2</a>) illustrates this guidance. An acquirer shall assess the need for a <a href=\"/glossary/v/#valuation-allowance\" class=\"term\" title=\"The portion of a deferred tax asset for which it is more likely than not that a tax benefit will not be realized.\"><span>valuation allowance</span></a> as of the acquisition date for an acquired entity's deferred tax asset in accordance with Subtopic <a altsource=\"GUID-3B0818A8-1B9D-4530-82D4-22D4284B582F.ditamap\" class=\"ditamap\">740-10</a>. </span></span> </div> </div>","snippet":"As of the acquisition date, a deferred tax liability or asset shall be recognized for an acquired entity's taxable or deductible temporary differences or operating loss or tax credit carryforwards except for differences …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26505b13969ee87e1fe457502a4d4bd54c6e290f07600d529d89b780bb5f99b0","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E1C5-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Guidance on tax-related matters related to the portion of goodwill for which amortization is not deductible for tax purposes is in paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/740/805/#740-805-25-8\" class=\"xref\">805-740-25-8 through 25-9</a></div>; guidance on accounting for the acquisition of <a href=\"/glossary/l/#leveraged-lease\" class=\"term\" title=\"From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.\"><span>leveraged leases</span></a> in a business combination is in Subtopic <a altsource=\"GUID-9B3AE0B5-9ADC-4C23-8C50-44ABCF9238C9.ditamap\" class=\"ditamap\">842-50</a>; and guidance on the specific acquired temporary differences identified in paragraph <a href=\"/asc/740/10/#740-10-25-3\" class=\"xref\">740-10-25-3(a)</a> is referred to in that paragraph. </span></span> </div> </div>","snippet":"Guidance on tax-related matters related to the portion of goodwill for which amortization is not deductible for tax purposes is in paragraphs 805-740-25-8 through 25-9; guidance on accounting for the acquisition of lever…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8e12443e860781191f040ef2deb0a2bf379cba1f0d94bf962146e45de2503be4","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-5","para":"25-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E300-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The tax bases used in the calculation of deferred tax assets and liabilities as well as amounts due to or receivable from taxing authorities related to prior <a href=\"/glossary/t/#tax-position\" class=\"term\" title=\"A position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. A tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets. The term tax position also encompasses, but is not limited to: A decision not to file a tax return An allocation or a shift of income between jurisdictions The characterization of income or a decision to exclude reporting taxable income in a tax return A decision to classify a transaction, entity, or other position in a tax return as tax exempt An entity's status, including its status as a pass-through entity or a tax-exempt not-for-profit entity.\"><span>tax positions</span></a> at the date of a business combination shall be calculated in accordance with Subtopic <a altsource=\"GUID-3B0818A8-1B9D-4530-82D4-22D4284B582F.ditamap\" class=\"ditamap\">740-10</a>. </span></span> </div> </div>","snippet":"The tax bases used in the calculation of deferred tax assets and liabilities as well as amounts due to or receivable from taxing authorities related to prior tax positions at the date of a business combination shall be c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:81509c08d80a72a059609fba30e0b1146fbcdb742d37a3fd0fb8cd7601d9280d","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-6","para":"25-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E405-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In a taxable business combination, the consideration paid is assigned to the assets acquired and liabilities assumed for financial reporting and tax purposes. However, the amounts recognized for particular assets and liabilities may differ for financial reporting and tax purposes. As required by paragraph <a href=\"/asc/740/805/#740-805-25-3\" class=\"xref\">805-740-25-3</a>, deferred tax liabilities and assets are recognized for the <a href=\"/glossary/d/#deferred-tax-consequences\" class=\"term\" title=\"The future effects on income taxes as measured by the applicable enacted tax rate and provisions of the enacted tax law resulting from temporary differences and carryforwards at the end of the current year.\"><span>deferred tax consequences</span></a> of those temporary differences. For example, a portion of the amount of goodwill for financial reporting may be allocated to some other asset for tax purposes, and amortization of that other asset may be deductible for tax purposes. If a valuation allowance is recognized for that deferred tax asset at the acquisition date, recognized benefits for those tax deductions after the acquisition date shall be applied in accordance with paragraph <a href=\"/asc/740/805/#740-805-45-2\" class=\"xref\">805-740-45-2</a>. </span></span> </div> </div>","snippet":"In a taxable business combination, the consideration paid is assigned to the assets acquired and liabilities assumed for financial reporting and tax purposes. However, the amounts recognized for particular assets and lia…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f1fe233733cbf41f37182490548375a5d7b510a59b32dee3f2dbacaa9687120","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-7","para":"25-7","html":"<div class=\"asc-body\"><div class=\"norm-text\">See Examples 1 through 3 (paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/740/805/#740-805-55-2\" class=\"xref\">805-740-55-2 through 55-8</a></div>) for illustrations of the recognition of deferred tax assets and related valuation allowances at the date of a nontaxable business combination.</div> </div>","snippet":"See Examples 1 through 3 (paragraphs 805-740-55-2 through 55-8) for illustrations of the recognition of deferred tax assets and related valuation allowances at the date of a nontaxable business combination.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:94491a920cb6236cce4acd17e33b697bf47e865929779bd27ed724ff8752b3af","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:85ef6034d521a464897c1e3c18090f5cde3c53822446f9af47e6036aec38dab0","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"block":null,"heading":"Goodwill","paragraphs":[{"citation":"740-805-25-8","para":"25-8","html":"<div class=\"asc-body\"><div class=\"norm-text\">Guidance on the financial accounting for goodwill is provided in Subtopic <a altsource=\"GUID-07A46B39-D6E9-4A67-AD7B-0D6E16D68152.ditamap\" class=\"ditamap\">350-20</a>. <span class=\"sfragment\" id=\"sfr_7FF4E528-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For tax purposes, amortization of goodwill is deductible in some tax jurisdictions. In those tax jurisdictions, the reported amount of goodwill and the tax basis of goodwill are each separated into two components as of the acquisition date for purposes of deferred tax calculations. </span></span><span class=\"sfragment\" id=\"sfr_7FF4E61D-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The first component of each equals the lesser of goodwill for financial reporting or tax-deductible goodwill. The second component of each equals the remainder of each, that is, the remainder, if any, of goodwill for financial reporting or the remainder, if any, of tax-deductible goodwill. </span></span></div> </div>","snippet":"Guidance on the financial accounting for goodwill is provided in Subtopic 350-20. For tax purposes, amortization of goodwill is deductible in some tax jurisdictions. In those tax jurisdictions, the reported amount of goo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6352076ab432af6d0ff5a3a0c65349e15fdc642597bf223adaf1c0e14a8259c9","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-9","para":"25-9","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E6FC-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Any difference that arises between the book and tax basis of that first component of goodwill in future years is a temporary difference for which a deferred tax liability or asset is recognized based on the requirements of Subtopic <a altsource=\"GUID-3B0818A8-1B9D-4530-82D4-22D4284B582F.ditamap\" class=\"ditamap\">740-10</a>. If that second component is an excess of tax-deductible goodwill over the reported amount of goodwill, the tax benefit for that excess is a temporary difference for which a deferred tax asset is recognized based on the requirements of that Subtopic (see Example 4 [paragraph <a href=\"/asc/740/805/#740-805-55-9\" class=\"xref\">805-740-55-9</a>]). However, if that second component is an excess of goodwill for financial reporting over the tax-deductible amount of goodwill, no deferred taxes are recognized either at the acquisition date or in future years. </span></span> </div> </div>","snippet":"Any difference that arises between the book and tax basis of that first component of goodwill in future years is a temporary difference for which a deferred tax liability or asset is recognized based on the requirements …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2aee72672a40c15759be8b08c061f6174cea0ed4fdd333b06b2e1d716207682e","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:53074d17102cd832a7581a200ff5a770902768c140ed56bcf3c606500e8f7f35","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"block":null,"heading":"Replacement Awards Classified as Equity","paragraphs":[{"citation":"740-805-25-10","para":"25-10","html":"<div class=\"asc-body\"><div class=\"norm-text\">Paragraph <a href=\"/asc/805/30/#805-30-30-9\" class=\"xref\">805-30-30-9</a> identifies the types of awards that are referred to as replacement awards in the Business Combinations Topic. <span class=\"sfragment\" id=\"sfr_7FF4E7E8-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For a replacement award classified as equity that ordinarily would result in postcombination tax deductions under current tax law, an acquirer shall recognize a deferred tax asset for the deductible temporary difference that relates to the portion of the <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.\"><span>fair-value</span></a>-based measure attributed to a precombination exchange of goods or services and therefore included in consideration transferred in the business combination. </span></span></div> </div>","snippet":"Paragraph 805-30-30-9 identifies the types of awards that are referred to as replacement awards in the Business Combinations Topic. For a replacement award classified as equity that ordinarily would result in postcombina…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bee870541ca7234301cb412ab2fccfdae7bed99e5a264d6aa38b5d867b46da2","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-11","para":"25-11","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E8CF-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For a replacement award classified as equity that ordinarily would not result in tax deductions under current tax law, an acquirer shall recognize no deferred tax asset for the portion of the fair-value-based measure attributed to precombination vesting and thus included in consideration transferred in the business combination. A future <a href=\"/glossary/e/#event\" class=\"term\" title=\"A happening of consequence to an entity. The term encompasses both transactions and other events affecting an entity.\"><span>event</span></a>, such as an employee's disqualifying disposition of shares under a tax law, may give rise to a tax deduction for instruments that ordinarily do not result in a tax deduction. The tax effects of such an event shall be recognized only when it occurs. </span></span> </div> </div>","snippet":"For a replacement award classified as equity that ordinarily would not result in tax deductions under current tax law, an acquirer shall recognize no deferred tax asset for the portion of the fair-value-based measure att…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:23fad98db6a8fbd764b02692f77457e01406be4c8dd4452f025ca62e73db6227","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f61383d477e6e66f81ad1e1161b3360b99bf1500bd00448e77a01dbf068ac475","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"block":null,"heading":"Allocation of Consolidated Tax Expense to the Acquired Entity after an Acquisition","paragraphs":[{"citation":"740-805-25-12","para":"25-12","html":"<div class=\"asc-body\"><div class=\"norm-text\">Paragraph <a href=\"/asc/740/10/#740-10-30-27\" class=\"xref\">740-10-30-27</a> provides general guidance on the allocation of consolidated tax expense to the separate financial statements of members of a consolidated group. Under certain conditions, paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/805/50/#805-50-25-4\" class=\"xref\">805-50-25-4 through 25-9</a></div> permit an acquired entity to retain its preacquisition historical basis in separately issued financial statements after an acquisition.</div> </div>","snippet":"Paragraph 740-10-30-27 provides general guidance on the allocation of consolidated tax expense to the separate financial statements of members of a consolidated group. Under certain conditions, paragraphs 805-50-25-4 thr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2c31e1542a3c597d7a76b3fc384dcff0acbeb5a3403c2abc29ebf23704a2d77b","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-13","para":"25-13","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7FF4E9EB-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If there is a continuation of the historical basis for financial reporting, </span></span> <span class=\"sfragment\" id=\"sfr_7FF4EAA1-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">for example, when pushdown accounting is not applied, </span></span> <span class=\"sfragment\" id=\"sfr_7FF4EB79-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">at the same time as there is a tax basis step-up, </span></span> <span class=\"sfragment\" id=\"sfr_7FF4EC2B-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">the tax benefit from the tax basis step-up shall be credited to the acquired entity's additional paid-in capital consistent with paragraph <a href=\"/asc/740/20/#740-20-45-11\" class=\"xref\">740-20-45-11(g)</a>. </span></span> <ol class=\"ol-norm\"> <li class=\"li-norm\"><span class=\"linum\">a</span> <div class=\"p\"> <a href=\"/updates/asu-2018-09/\" class=\"xref\">Subparagraph superseded by Accounting Standards Update No. 2018-09</a>.</div> </li> <li class=\"li-norm\"><span class=\"linum\">b</span> <div class=\"p\"> <a href=\"/updates/asu-2018-09/\" class=\"xref\">Subparagraph superseded by Accounting Standards Update No. 2018-09</a>.</div> </li> <li class=\"li-norm\"><span class=\"linum\">c</span> <div class=\"p\"> <a href=\"/updates/asu-2018-09/\" class=\"xref\">Subparagraph superseded by Accounting Standards Update No. 2018-09</a>.</div> </li> </ol> </div> </div>","snippet":"If there is a continuation of the historical basis for financial reporting, for example, when pushdown accounting is not applied, at the same time as there is a tax basis step-up, the tax benefit from the tax basis step-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:df3969a197b1ecb138f8c91fada7e37c8546119afb598aee96601134f5f7ecec","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}},{"citation":"740-805-25-14","para":"25-14","html":"<div class=\"asc-body\"><div class=\"norm-text\">Paragraph <a href=\"/asc/740/10/#740-10-50-17\" class=\"xref\">740-10-50-17</a> specifies the disclosure requirements for separately issued financial statements of an entity that is a member of a group that files a consolidated tax return.</div> </div>","snippet":"Paragraph 740-10-50-17 specifies the disclosure requirements for separately issued financial statements of an entity that is a member of a group that files a consolidated tax return.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e334c0dd2ff001381cb0d0e155cfd1d0dd375314e4813e811a7d50ee0bc4e4bb","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479172","source_sha256":"fdbece0860b312bbb454825b2e0a00c355a17831aab909f02de8d2c167abce26"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:607e701b7a7efc0b8524d2c84750724c3044f6274b19f1e6ee1950996eda76df","downloaded_from":"2026-09-10T01:18:18.032Z","last_downloaded_at":"2026-09-10T01:18:18.032Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not 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