{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/805/10/#05-overview-and-background","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":"805","topic_title":"Business Combinations","subtopic":"805-10","subtopic_title":"Overall","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"805-10-05-1","para":"05-1","html":"
The Business Combinations Topic provides guidance on the accounting and reporting for transactions that represent business combinations to be accounted for under the acquisition method (as described in paragraph 805-10-05-4). In addition, the Topic includes Subtopic 805-50, which provides guidance on transactions sometimes associated with business combinations but that do not meet the requirements to be accounted for as business combinations under the acquisition method, and Subtopic 805-60, which provides guidance on the formation of a joint venture. The Business Combinations Topic includes the following Subtopics:
  1. a
    Overall
  2. b
    Identifiable Assets and Liabilities, and Any Noncontrolling Interest
  3. c
    Goodwill or Gain from Bargain Purchase, Including Consideration Transferred
  4. d
    Reverse Acquisitions
  5. e
    Related Issues
  6. f
    Income Taxes
  7. g
    Joint Venture Formations.
","snippet":"The Business Combinations Topic provides guidance on the accounting and reporting for transactions that represent business combinations to be accounted for under the acquisition method (as described in paragraph 805-10-0…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0898cd55938aff8e22e82157c926361b2544cdc9f4ce14efbd2e2ad63fe3405","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},{"citation":"805-10-05-2","para":"05-2","html":"
To accomplish the objective identified in paragraph 805-10-10-1, this Topic establishes principles and requirements for how the acquirer does each of the following:
  1. a
    Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree
  2. b
    Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase
  3. c
    Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
","snippet":"To accomplish the objective identified in paragraph 805-10-10-1, this Topic establishes principles and requirements for how the acquirer does each of the following:\n(a) Recognizes and measures in its financial statements…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:059e83eb1499b835483be52705a0c48498989154dda21df3d0cda2d56b6619bd","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},{"citation":"805-10-05-3","para":"05-3","html":"
This Subtopic and Subtopics 805-20 and 805-30 address specific aspects of the acquisition method. Subtopic 805-20 addresses the recognition and measurement of identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. Subtopic 805-30 addresses the recognition and measurement of goodwill or a gain from a bargain purchase. This Subtopic addresses requirements of the acquisition method, as outlined in the following paragraph, not addressed by those two Subtopics, including the following:
  1. a
    Whether a particular transaction or event is a business combination
  2. b
    The identification of the acquirer and the acquisition date
  3. c
    The period of time that an acquirer has to adjust provisional amounts, referred to as the measurement period
  4. d
    The determination of what is part of a business combination transaction.
","snippet":"This Subtopic and Subtopics 805-20 and 805-30 address specific aspects of the acquisition method. Subtopic 805-20 addresses the recognition and measurement of identifiable assets acquired, the liabilities assumed, and an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f5bdd2b5b9369282cf6f258ec13b6ef2976e68389bbeb2baf8962c7c8f12a78b","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},{"citation":"805-10-05-4","para":"05-4","html":"
Paragraph 805-10-25-1 requires that a business combination be accounted for by applying what is referred to as the acquisition method. The acquisition method requires all of the following steps:
  1. a
    Identifying the acquirer
  2. b
    Determining the acquisition date
  3. c
    Recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree
  4. d
    Recognizing and measuring goodwill or a gain from a bargain purchase.
","snippet":"Paragraph 805-10-25-1 requires that a business combination be accounted for by applying what is referred to as the acquisition method. The acquisition method requires all of the following steps:\n(a) Identifying the acqui…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce19847917594fc7991d88eeef43294b0fb19a708fe31a3df750ac44d045e0fd","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},{"citation":"805-10-05-5","para":"05-5","html":"
This Subtopic addresses steps (a) and (b) of the acquisition method as listed in the preceding paragraph. Subtopic 805-20 addresses step (c) and Subtopic 805-30 addresses step (d).
","snippet":"This Subtopic addresses steps (a) and (b) of the acquisition method as listed in the preceding paragraph. Subtopic 805-20 addresses step (c) and Subtopic 805-30 addresses step (d).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:17c0a3be0b1ba2223656e25b9de77c7e9bcd36ab68134730fccf7c7485d13ed2","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},{"citation":"805-10-05-6","para":"05-6","html":"
Paragraphs presented in bold type in this Topic state the main principles. All paragraphs have equal authority.
","snippet":"Paragraphs presented in bold type in this Topic state the main principles. All paragraphs have equal authority.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e63c041151624c0aecfb9bad68ac280182e92199720bc84c13bc360edd7a4197","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d33a95689fada289dc7642d8a7ffe6908809dcaab5ff94f737496e4a69b2fb46","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e66fc8ead34cf1c4bf4043061c3d11d22b25cd4c45390e53bd4245d869df3985","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e66fc8ead34cf1c4bf4043061c3d11d22b25cd4c45390e53bd4245d869df3985","downloaded_from":"2026-09-10T01:22:19.043Z","last_downloaded_at":"2026-09-10T01:22:19.043Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479515","source_sha256":"8df668b0f86bcd6a12d77f0b1c481d24b2dd8c18d167c90ce504521f81eef4be"}}