# ASC 805-20-30: Business Combinations — Identifiable Assets and Liabilities, and Any Noncontrolling Interest — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/20/#30-initial-measurement) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:bad641db13390b16587172188958ab44fa26be0a05454f9197d29f8b30d8de8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-20-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/805/20/#30-initial-measurement) SEC content: no #### Measurement Principle ##### [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:5623f3548ae4e16dcffb947a0a4b76b7c888155b44ff2f8635d3489eeb1b602e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [acquirer](https://asc.understandingaccounting.org/glossary/a/#acquirer "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.") shall measure the [identifiable](https://asc.understandingaccounting.org/glossary/i/#identifiable "An asset is identifiable if it meets either of the following criteria: It is separable, that is, capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability, regardless of whether the entity intends to do so. It arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.") assets acquired, the liabilities assumed, and any [noncontrolling interest](https://asc.understandingaccounting.org/glossary/n/#noncontrolling-interest "The portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. A noncontrolling interest is sometimes called a minority interest.") in the [acquiree](https://asc.understandingaccounting.org/glossary/a/#acquiree "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.") at their [acquisition-date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree.")[fair values](https://asc.understandingaccounting.org/glossary/f/#fair-value "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."). ##### [805-20-30-2](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-2) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:8fdfbbebc490d26384058f2bce5623e73b4b811ced82bd1a7d148dab50027733 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Exceptions to the measurement principle are identified and their accounting treatment is addressed in paragraphs [805-20-30-10 through 30-26](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-10) . Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance: [832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)Exceptions to the measurement principle are identified and their accounting treatment is addressed in paragraphs [805-20-30-10 through 30-31](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-10) . Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)Exceptions to the measurement principle are identified and their accounting treatment is addressed in paragraphs [805-20-30-10 through 30-32](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-10) . #### Measuring the Fair Values of Particular Identifiable Assets and a Noncontrolling Interest in an Acquiree ##### [805-20-30-3](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:72d5bc7baf76441e2b44d0016f333388f0aab9f7cadd36b12e11ff56c1938951 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance demonstrates the application of the measurement principle in paragraph [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) to specific situations in a [business combination](https://asc.understandingaccounting.org/glossary/b/#business-combination "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.") including guidance on measuring the fair values of particular identifiable assets and a noncontrolling interest in an acquiree. ##### [805-20-30-4](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:4e6f692a938b7ddafa4262780af0cd83fe5c1deb98767ac19dec6cb4fc2ed8ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall not recognize a separate valuation allowance as of the [acquisition date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree.") for assets acquired in a business combination that are measured at their acquisition-date fair values because the effects of uncertainty about future cash flows are included in the fair value measure, unless the assets acquired are financial assets for which the acquirer shall refer to the guidance in paragraphs [805-20-30-4A through 30-4B](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-4A) . ##### [805-20-30-4A](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-4A) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:ba3967ea10a33a51b0fae033834f3bc8585d8e7f2441508b0e871bf4a32cb587 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For acquired financial assets that are not [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis."), the acquirer shall record the purchased financial assets at the acquisition-date fair value. Additionally, for these financial assets within the scope of Topic 326, an allowance shall be recorded with a corresponding charge to credit loss expense as of the reporting date. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)For acquired financial assets that are not [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")or [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans."), the acquirer shall record the acquired financial assets at the acquisition-date fair value. Additionally, for these financial assets within the scope of Topic 326, an allowance shall be recorded with a corresponding charge to credit loss expense as of the reporting date. ##### [805-20-30-4B](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-4B) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:c43eb6f96049e2658121d1caab2955e90b5ef0a82e820b41f6e905e8f7943db6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For assets accounted for as purchased financial assets with credit deterioration (which includes beneficial interests that meet the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)), an acquirer shall recognize an allowance in accordance with Topic 326 with a corresponding increase to the amortized cost basis of the financial asset(s) as of the acquisition date. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)For assets accounted for as purchased financial assets with credit deterioration (which includes beneficial interests that meet the criteria in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) and purchased seasoned loans, an acquirer shall recognize an allowance in accordance with Topic 326 with a corresponding increase to the amortized cost basis of the financial asset(s) as of the acquisition date. ##### [805-20-30-5](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:1c50bceabef32c6871ba9bd7b66445c1e702e8cf3d1318269b73e2ca02fecfbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure the acquisition-date fair value of an asset, such as a building or a patent or other intangible asset, that is subject to an operating lease in which the acquiree is the lessor separately from the lease contract. In other words, the fair value of the asset shall be the same regardless of whether it is subject to an operating lease. In accordance with paragraph [805-20-25-12](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-12), the acquirer separately recognizes an asset or a liability if the terms of the lease are favorable or unfavorable relative to market terms. ##### [805-20-30-6](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:7c5c7870a9e8d36ae45c47a1dc81a7837ddcf74f86ae0c62aee6e8c3317ef977 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To protect its competitive position, or for other reasons, the acquirer may intend not to use an acquired nonfinancial asset actively, or it may not intend to use the asset according to its highest and best use. For example, that might be the case for an acquired research and development intangible asset that the acquirer plans to use defensively by preventing others from using it. Nevertheless, the acquirer shall measure the fair value of the nonfinancial asset in accordance with Subtopic 820-10 assuming its highest and best use by market participants in accordance with the appropriate valuation premise, both initially and for purposes of subsequent impairment testing. ##### [805-20-30-7](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:38a4dc5c74365ef7d005998ed1c033b140e3450ef788c15792b8de34d347005f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) requires the acquirer to measure a noncontrolling interest in the acquiree at its fair value at the acquisition date. An acquirer sometimes will be able to measure the acquisition-date fair value of a noncontrolling interest on the basis of a quoted price in an active market for the equity shares (that is, those not held by the acquirer). In other situations, however, a quoted price in an active market for the equity shares will not be available. In those situations, the acquirer would measure the fair value of the noncontrolling interest using another valuation technique. ##### [805-20-30-8](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:196303e94c4aeb698caf1e6eb2b88a90859fb98e4964bbc2e522e82c3465735c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair values of the acquirer's interest in the acquiree and the noncontrolling interest on a per-share basis might differ. The main difference is likely to be the inclusion of a control premium in the per-share fair value of the acquirer's interest in the acquiree or, conversely, the inclusion of a discount for lack of control (also referred to as a noncontrolling interest discount) in the per-share fair value of the noncontrolling interest if market participants would take into account such a premium or discount when pricing the noncontrolling interest. #### Measurement of Assets and Liabilities Arising from Contingencies ##### [805-20-30-9](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:8a3a5eaec70f1dba2e5b200ccbf3ba3ef9a5749d784df17cd9473c3aec8531da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [805-20-25-18A through 25-20B](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-18A) establish the requirements related to recognition of certain assets and liabilities arising from [contingencies](https://asc.understandingaccounting.org/glossary/c/#contingency "An existing condition, situation, or set of circumstances involving uncertainty as to possible gain (gain contingency) or loss (loss contingency) to an entity that will ultimately be resolved when one or more future events occur or fail to occur."). Initial measurement of assets and liabilities meeting the recognition criteria in paragraph [805-20-25-19](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-19) shall be at acquisition-date fair value. Guidance on the initial measurement of other assets and liabilities from contingencies not meeting the recognition criteria of that paragraph, but meeting the criteria in paragraph [805-20-25-20](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-20) is at paragraph [805-20-30-23](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-23). ##### [805-20-30-9A](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-9A) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:2b37eca3f320bebb61dc3b2174b6886d34b0882fde6aa60b570bf57a7aca6727 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contingent consideration arrangements of an acquiree assumed by the acquirer in a business combination shall be measured initially at fair value in accordance with the guidance for contingent consideration arrangements in paragraph [805-30-25-5](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-5). #### Exceptions to the Measurement Principle ##### [805-20-30-10](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-10) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:e65ec6edf4852f8034f13fa718e35455deb8f738630761354fb839da0c7971c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [805-20-25-16](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-16) notes that the Business Combinations Topic provides limited exceptions to the recognition and measurement principles applicable to business combinations. Paragraphs [805-20-30-12 through 30-30](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) specify the types of identifiable assets and liabilities that include items for which this Subtopic provides limited exceptions to the paragraph [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) measurement principle. The acquirer shall apply the specified GAAP or the specified requirements rather than that measurement principle to determine how to measure the assets or liabilities identified in paragraphs [805-20-30-12 through 30-30](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) . That will result in some items being measured at an amount other than their acquisition-date fair values. Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance: [832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)Paragraph [805-20-25-16](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-16) notes that the Business Combinations Topic provides limited exceptions to the recognition and measurement principles applicable to business combinations. Paragraphs [805-20-30-12 through 30-31](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) specify the types of identifiable assets and liabilities that include items for which this Subtopic provides limited exceptions to the paragraph [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) measurement principle. The acquirer shall apply the specified GAAP or the specified requirements rather than that measurement principle to determine how to measure the assets or liabilities identified in paragraphs[805-20-30-12 through 30-31](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) . That will result in some items being measured at an amount other than their acquisition-date fair values. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)Paragraph [805-20-25-16](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-16) notes that the Business Combinations Topic provides limited exceptions to the recognition and measurement principles applicable to business combinations. Paragraphs [805-20-30-12 through 30-32](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) specify the types of identifiable assets and liabilities that include items for which this Subtopic provides limited exceptions to the paragraph [805-20-30-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-1) measurement principle. The acquirer shall apply the specified GAAP or the specified requirements rather than that measurement principle to determine how to measure the assets or liabilities identified in paragraphs[805-20-30-12 through 30-32](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) . That will result in some items being measured at an amount other than their acquisition-date fair values. ##### [805-20-30-11](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-11) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:7dfd4594b5de58e3bb9383a58df0b2675b4877403b2fb7cf56de4e5d7b477e10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As noted in paragraph [805-20-25-17](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-17), income taxes, employee benefits, indemnification assets, leases, and [contract assets](https://asc.understandingaccounting.org/glossary/c/#contract-asset "An entity's right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity's future performance).") and [contract liabilities](https://asc.understandingaccounting.org/glossary/c/#contract-liability "An entity's obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer.") are also exceptions to the recognition principle in paragraph [805-20-25-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-1). Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance: [832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)As noted in paragraph [805-20-25-17](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-17), income taxes, employee benefits, indemnification assets, leases, [contract assets](https://asc.understandingaccounting.org/glossary/c/#contract-asset "An entity's right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity's future performance).") and [contract liabilities](https://asc.understandingaccounting.org/glossary/c/#contract-liability "An entity's obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer."), and [grants related to income](https://asc.understandingaccounting.org/glossary/g/#grant-related-to-income "(P) December 16, 2028; (N) December 16, 2029832-10-65-2A government grant, or part of a government grant, other than a grant related to an asset (for example, a grant that reimburses an entity for operating expenses).")are also exceptions to the recognition principle in paragraph [805-20-25-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-1). ##### [805-20-30-12](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-12) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:4864689e2abc345c190a48a9828e4a2c228d7b48a8d3ddac10098839fbc3efa0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Guidance is presented on all of the following exceptions to the measurement principle: 1. a Income taxes 2. b Employee benefits 3. c Indemnification assets 4. d Reacquired rights 5. e Share-based payment awards 6. f Assets held for sale 7. g Certain assets and liabilities arising from contingencies 8. h Leases 9. i [Purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.") 10. j Contract assets and contract liabilities. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)Guidance is presented on all of the following exceptions to the measurement principle: 1. a Income taxes 2. b Employee benefits 3. c Indemnification assets 4. d Reacquired rights 5. e Share-based payment awards 6. f Assets held for sale 7. g Certain assets and liabilities arising from contingencies 8. h Leases 9. i [Purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")and [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans.") 10. j Contract assets and contract liabilities. Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance: [832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)Guidance is presented on all of the following exceptions to the measurement principle: 1. a Income taxes 2. b Employee benefits 3. c Indemnification assets 4. d Reacquired rights 5. e Share-based payment awards 6. f Assets held for sale 7. g Certain assets and liabilities arising from contingencies 8. h Leases 9. i [Purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")and [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans.") 10. j Contract assets and contract liabilities 11. k Grants related to income. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)Guidance is presented on all of the following exceptions to the measurement principle: 1. a Income taxes 2. b Employee benefits 3. c Indemnification assets 4. d Reacquired rights 5. e Share-based payment awards 6. f Assets held for sale 7. g Certain assets and liabilities arising from contingencies 8. h Leases 9. i [Purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.")and [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans.") 10. j Contract assets and contract liabilities 11. k Grants related to income 12. l [Environmental credit obligations.](https://asc.understandingaccounting.org/glossary/e/#environmental-credit-obligation "(P) December 16, 2027; (N) December 16, 2028818-10-65-1A regulatory compliance obligation arising from existing or enacted laws, statutes, or ordinances represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. Obligations within the scope of Subtopic 410-30 are not environmental credit obligations.") ##### [805-20-30-13](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:bd0c3c734e9629966584642933eab2a5b678e91f23cd54d1c4decd33e1ef1cb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Section 805-740-30 establishes the measurement guidance related to accounting for income taxes in a business combination. ##### [805-20-30-14](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:09c54b22c6d4ff1e42af5d5756132a4fcf709a72ccb2d6e75bdbb555952e5a30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure a liability (or asset, if any) related to the acquiree's employee benefit arrangements in accordance with other GAAP. For example, employee benefits in the scope of the guidance identified in paragraphs [805-20-30-15 through 30-17](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-15) would be measured in accordance with that guidance and as specified in those paragraphs. ##### [805-20-30-15](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:9cc5c8f65ae9a873c0470e33cdcbeaefa0e2a677dc571de9c064431b039f3f46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Guidance on defined benefit pension plans is presented in Subtopic 715-30. Guidance on defined benefit other postretirement plans is presented in Subtopic 715-60. Paragraphs [805-20-25-23](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-23) and [805-20-25-25](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-25) require an acquirer to recognize as part of a business combination an asset or a liability representing the funded status of a single-employer defined benefit pension or postretirement plan. In determining that funded status, the acquirer shall exclude the effects of expected plan amendments, terminations, or curtailments that at the acquisition date it has no obligation to make. The projected benefit obligation assumed shall reflect any other necessary changes in assumptions based on the acquirer's assessment of relevant future events. ##### [805-20-30-16](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:15745a883fffa0723f8a2af3b52ff3914e488c098653fb6297257c6585fc444c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsection of Section 715-30-35 establishes the measurement guidance related to accounting for settlements and curtailments of defined benefit pension plans and certain termination benefits. ##### [805-20-30-17](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:cf5ffde4b4140021dd31a95a8128a65d2505d44adc398fdcebf8f91e314b858b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See also measurement-related guidance for the following other employee benefit arrangements: 1. a One-time termination benefits in connection with exit or disposal activities. See Section 420-10-30. 2. b Compensated absences. See Section 710-10-25. 3. c Deferred compensation contracts. See Section 710-10-30. 4. d Nonretirement postemployment benefits. See Section 712-10-25. ##### [805-20-30-18](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:4720683510621062920d64e1b4fedbd3f934bf38531e3439281a904b077ece28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [805-20-25-27](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-27) requires that the acquirer recognize an indemnification asset at the same time that it recognizes the indemnified item, measured on the same basis as the indemnified item, subject to the need for a valuation allowance for uncollectible amounts. That paragraph also requires that, if the indemnification relates to an asset or a liability that is recognized at the acquisition date and measured at its acquisition-date fair value, the acquirer recognize the indemnification asset at the acquisition date measured at its acquisition-date fair value. For an indemnification asset measured at fair value, the effects of uncertainty about future cash flows because of collectibility considerations are included in the fair value measure and a separate valuation allowance is not necessary, as noted in paragraph [805-20-30-4](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-4). ##### [805-20-30-19](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:1e53b9c0172bbc75176827c9bed70858cc4f1129143a6f063546164e45642a64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [805-20-25-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-28) states that in some circumstances, the indemnification may relate to an asset or a liability that is an exception to the recognition or measurement principles, and provides an example of an indemnification that may relate to a contingency that is not recognized at the acquisition date because it does not satisfy the criteria for recognition in paragraphs [805-20-25-18A through 25-19](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-18A) at that date. Alternatively, an indemnification may relate to an asset or a liability, for example, one that results from an uncertain tax position that is measured on a basis other than acquisition-date fair value. (Paragraph [805-20-30-13](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-13) identifies the business-combination-related measurement requirements for income taxes.) Paragraph [805-20-25-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-28) establishes that in those circumstances, the indemnification asset shall be recognized and measured using assumptions consistent with those used to measure the indemnified item, subject to management's assessment of the collectibility of the indemnification asset and any contractual limitations on the indemnified amount. ##### [805-20-30-20](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:d1064e972ea4f1a574553cf879bd7cda2fa5eb2bec968139122fb5a4fa5da1df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure the value of a reacquired right recognized as an intangible asset in accordance with paragraph [805-20-25-14](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-14) on the basis of the remaining contractual term of the related contract regardless of whether market participants would consider potential contractual renewals in determining its fair value. ##### [805-20-30-21](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:34dc252ea0be91c46ab5eb8752f4a1eecf090a476b13a94cfd01924276c3034c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure a liability or an equity instrument related to the replacement of an acquiree's share-based payment awards with share-based payment awards of the acquirer in accordance with the method in Topic 718. The Business Combinations Topic refers to the result of that method as the fair-value-based measure of the award. Paragraphs [805-30-30-9 through 30-13](https://asc.understandingaccounting.org/asc/805/30/#805-30-30-9) and [805-30-55-6 through 55-13](https://asc.understandingaccounting.org/asc/805/30/#805-30-55-6) provide additional guidance. ##### [805-20-30-22](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:4dc0355adfad2325e7b2d33d667568a81057fa5f81f37f6aeee7397cd5fac646 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure an acquired long-lived asset (or disposal group) that is classified as held for sale at the acquisition date in accordance with Subtopic 360-10, at fair value less cost to sell in accordance with paragraphs [360-10-35-38](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-38) and [360-10-35-43](https://asc.understandingaccounting.org/asc/360/10/#360-10-35-43). ##### [805-20-30-23](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:af56c4183aeead49d85f6dcb183e51560759cc4251bb6fb6c46c0650d4ce64b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Initial measurement of assets and liabilities meeting the recognition criteria in paragraph [805-20-25-20](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-20) shall be at the amount that can be reasonably estimated by applying the guidance in Topic 450 for application of similar criteria in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2). ##### [805-20-30-24](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:d1421d3650af6e839561d6854c12dbab5d2fcce17146b5249d0ea8061be56ef8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For [leases](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") in which the acquiree is a [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration."), the acquirer shall measure the [lease liability](https://asc.understandingaccounting.org/glossary/l/#lease-liability "A lessee's obligation to make the lease payments arising from a lease, measured on a discounted basis.") at the present value of the remaining [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor."), as if the acquired lease were a new lease of the acquirer at the acquisition date. The acquirer shall measure the [right-of-use asset](https://asc.understandingaccounting.org/glossary/r/#right-of-use-asset "An asset that represents a lessee's right to use an underlying asset for the lease term.") at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. ##### [805-20-30-25](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:5678a91c784ebfdec9da4818791dee4ff82d65a0efed8caa018ea6be1e7631e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For leases in which the acquiree is a lessor of a [sales-type lease](https://asc.understandingaccounting.org/glossary/s/#sales-type-lease "From the perspective of a lessor, a lease that meets one or more of the criteria in paragraph 842-10-25-2 and is not an operating lease in accordance with paragraph 842-10-25-3A.") or a [direct financing lease](https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease "From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A."), the acquirer shall measure its [net investment in the lease](https://asc.understandingaccounting.org/glossary/n/#net-investment-in-the-lease "For a sales-type lease, the sum of the lease receivable and the unguaranteed residual asset. For a direct financing lease, the sum of the lease receivable and the unguaranteed residual asset, net of any deferred selling profit.") as the sum of both of the following (which will equal the fair value of the [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") at the acquisition date): 1. a The [lease receivable](https://asc.understandingaccounting.org/glossary/l/#lease-receivable "A lessor's right to receive lease payments arising from a sales-type lease or a direct financing lease plus any amount that a lessor expects to derive from the underlying asset following the end of the lease term to the extent that it is guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") at the present value, discounted using the rate implicit in the lease, of the following, as if the acquired lease were a new lease at the acquisition date: 1. 1 The remaining lease payments 2. 2 The amount the lessor expects to derive from the underlying asset following the end of the lease term that is guaranteed by the lessee or any other third party unrelated to the lessor. 2. b The [unguaranteed residual asset](https://asc.understandingaccounting.org/glossary/u/#unguaranteed-residual-asset "The amount that a lessor expects to derive from the underlying asset following the end of the lease term that is not guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") as the difference between the fair value of the underlying asset at the acquisition date and the carrying amount of the lease receivable, as determined in accordance with (a), at that date. The acquirer shall take into account the terms and conditions of the lease in calculating the acquisition-date fair value of an underlying asset that is subject to a sales-type lease or a direct financing lease by the acquiree-lessor. ##### [805-20-30-26](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-26) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:bfc6ff2a5c266b29bb78f86661d2dbbb992a534ef6e6fd1cb74e45b8adae522d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An acquirer shall recognize [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.") (including beneficial interests meeting the conditions in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) in accordance with Section 326-20-30 for financial instruments measured at amortized cost or Section 326-30-30 for available-for-sale debt securities. Paragraphs [326-20-55-57 through 55-78](https://asc.understandingaccounting.org/asc/326/20/#326-20-55-57) illustrate how the guidance is applied for purchased financial assets with credit deterioration measured at amortized cost. Paragraphs [326-30-55-5 through 55-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-5) illustrate how the guidance is applied to available-for-sale debt securities. An acquirer shall not accrete into interest income the credit losses embedded in the purchase price for purchased financial assets with credit deterioration. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [326-10-65-7](https://asc.understandingaccounting.org/asc/326/10/#326-10-65-7)
Editor's Note: The content of paragraph 805-20-30-26 will be amended upon transition, together with a change in the heading noted below.
> Purchased Financial Assets with Credit Deterioration and Purchased Seasoned Loans
An acquirer shall recognize [purchased financial assets with credit deterioration](https://asc.understandingaccounting.org/glossary/p/#purchased-financial-assets-with-credit-deterioration "Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer's assessment. See paragraph 326-20-55-5 for more information on the meaning of similar risk characteristics for assets measured on an amortized cost basis.") (including beneficial interests meeting the conditions in paragraph [325-40-30-1A](https://asc.understandingaccounting.org/asc/325/40/#325-40-30-1A)) and [purchased seasoned loans](https://asc.understandingaccounting.org/glossary/p/#purchased-seasoned-loans "(P) December 16, 2026; (N) December 16, 2026 326-10-65-7 Paragraphs 326-20-30-16326-20-30-17326-20-30-18 define the term purchased seasoned loans.")in accordance with Section 326-20-30 for financial instruments measured at amortized cost or Section 326-30-30 for available-for-sale debt securities. Paragraphs [326-20-55-57 through 55-78](https://asc.understandingaccounting.org/asc/326/20/#326-20-55-57) illustrate how the guidance is applied for purchased financial assets with credit deterioration measured at amortized cost. Paragraphs [326-30-55-5 through 55-7](https://asc.understandingaccounting.org/asc/326/30/#326-30-55-5) illustrate how the guidance is applied to available-for-sale debt securities. An acquirer shall not accrete into interest income the credit losses embedded in the purchase price for purchased financial assets with credit deterioration and purchased seasoned loans. ##### [805-20-30-27](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:6aaf904653ee221e69326f94a50ac90e14d441bc8124db8ad7f2610b97eef95d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An acquirer shall measure a contract asset or contract liability in accordance with Topic 606 on revenue from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration."). This includes a contract asset or contract liability from the following: 1. a Contracts with customers 2. b Other contracts to which the provisions of Topic 606 apply. ##### [805-20-30-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:978e6631c2679313a9c887b0edf0195fbe2ee44b6d8e8a8cfc31977a25593d3a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An acquirer shall measure the contract assets and contract liabilities of the acquired contract as if the acquirer had originated the acquired contract. Topic 606 specifies when certain assessments and estimates should be made, for example, as of contract inception or on a recurring basis. At the acquisition date, the acquirer shall make those assessments as of the dates required by Topic 606. ##### [805-20-30-29](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:b74b47e4e16624fbc9d6382ea3e7fd14615a99bceb7724ffdbfb044b257a3f15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An acquirer may use one or more of the following practical expedients when applying paragraphs [805-20-30-27 through 30-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-27) at the acquisition date: 1. a For contracts that were modified before the acquisition date, an acquirer may reflect the aggregate effect of all modifications that occur before the acquisition date when: 1. 1 Identifying the satisfied and unsatisfied [performance obligations](https://asc.understandingaccounting.org/glossary/p/#performance-obligation "A promise in a contract with a customer to transfer to the customer either: A good or service (or a bundle of goods or services) that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.") 2. 2 Determining the [transaction price](https://asc.understandingaccounting.org/glossary/t/#transaction-price "The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.") 3. 3 Allocating the transaction price to the satisfied and unsatisfied performance obligations. 2. b For all contracts, for purposes of allocating the transaction price, an acquirer may determine the [standalone selling price](https://asc.understandingaccounting.org/glossary/s/#standalone-selling-price "The price at which an entity would sell a promised good or service separately to a customer.") at the acquisition date (instead of the contract inception date) of each performance obligation in the contract. ##### [805-20-30-30](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:c020b6387b7d0ab246ae9506217fcfd479977636a5c858e20f3a47b773e0efca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For any of the practical expedients in paragraph [805-20-30-29](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-29) that an acquirer uses, the acquirer shall apply that expedient on an acquisition-by-acquisition basis. Each practical expedient that is elected shall be applied consistently to all contracts acquired in the same business combination. In addition, the acquirer shall provide the disclosures in paragraph [805-20-50-5](https://asc.understandingaccounting.org/asc/805/20/#805-20-50-5). ##### [805-20-30-31](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-31) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:d93090b2a7e831c57216f726403a4166fb3e370b896e95c51bc7510a7755d760 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2028; (N) December 16, 2029Transition guidance: [832-10-65-2](https://asc.understandingaccounting.org/asc/832/10/#832-10-65-2)Deferred income recognized in accordance with paragraph [805-20-25-28D](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-28D) shall be measured in accordance with Topic 832 on [government grants](https://asc.understandingaccounting.org/glossary/g/#government-grant "(P) December 16, 2028; (N) December 16, 2029832-10-65-2A transfer of a monetary asset or a tangible nonmonetary asset, other than in an exchange transaction (including an exchange transaction that may be at a significant discount to fair value), from a government to an entity except for a not-for-profit entity and an employee benefit plan within the scope of Topics 960, 962, and 965 on plan accounting.") at the acquisition date. ##### [805-20-30-32](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-32) Pending content: yes Source downloaded (UTC): 2026-09-10T01:23:23.165Z to 2026-09-10T01:23:23.165Z Record version: sha256:79ccb721b8db3eeb4edef8de2ee7a6691d66add91c5440f59f90828f2402f376 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [818-10-65-1](https://asc.understandingaccounting.org/asc/818/10/#818-10-65-1)An acquirer shall measure an environmental credit obligation liability assumed in a business combination in accordance with the initial measurement requirements of Topic 818. Paragraph [818-30-30-1](https://asc.understandingaccounting.org/asc/818/30/#818-30-30-1) specifies that an environmental credit obligation liability may have a funded portion and an unfunded portion. When measuring the funded portion in accordance with paragraph [818-30-30-2](https://asc.understandingaccounting.org/asc/818/30/#818-30-30-2), an acquirer shall consider only [environmental credits](https://asc.understandingaccounting.org/glossary/e/#environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An enforceable right that is acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a nonreciprocal transfer that is not a grant from a regulator or its designee(s) that meets all of the following criteria:Lacks physical substance and is not a financial asset.Is represented to prevent, control, reduce, or remove emissions or other pollution.Is, or previously was, separately transferable in an exchange transaction. If an item is no longer separately transferable in an exchange transaction, an entity must be able to use that item to satisfy an environmental credit obligation to meet this criterion.Is not an income tax credit that may be used to settle an entity’s income tax liability, regardless of whether the entity has a tax liability or intends to use the credit for that purpose.An environmental credit that meets the above criteria may exist in a variety of forms, including (but not limited to) credits, certificates, allowances, and offsets.") acquired in the business combination that will be classified as [compliance environmental credits](https://asc.understandingaccounting.org/glossary/c/#compliance-environmental-credit "(P) December 16, 2027; (N) December 16, 2028818-10-65-1An environmental credit recognized as an asset in accordance with Topic 818 and probable of being used to settle an environmental credit obligation."). If applicable, the unfunded portion of an environmental credit obligation liability measured in accordance with paragraph [818-30-30-3(b)](https://asc.understandingaccounting.org/asc/818/30/#818-30-30-3) shall consider only the acquiree’s existing purchase commitments and unconditional rights.