# ASC 805-20-35: Business Combinations — Identifiable Assets and Liabilities, and Any Noncontrolling Interest — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/20/#35-subsequent-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): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:171a72428296a74c08045c8c6fcc6a4f1dba911257aa1d0c281aa68caa99bfa5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/805/20/#35-subsequent-measurement) SEC content: no #### Guidance on Specific Business-Combination-Related Items ##### [805-20-35-1](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:ddac27c55937aeaff0c1e874c25b7ba6cb09d43a530c10e665380820a3e5ea8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic directly establishes generally accepted accounting principles (GAAP) for [business combinations](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.") related to recognition and initial measurement. Paragraph [805-10-35-1](https://asc.understandingaccounting.org/asc/805/10/#805-10-35-1) cites the general requirement for an [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.") to subsequently measure and account for assets acquired, liabilities assumed or incurred, and equity instruments issued 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.") in accordance with other applicable generally accepted accounting principles (GAAP). However, that paragraph also identifies specific items for which this Topic provides guidance. This Subtopic provides guidance on several of those specific items as follows. ##### [805-20-35-2](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:c5fd3d5cdc2c2ecc5efdd60ea3435f7ad9fb70b01adcb899bdd4f3586a647540 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A reacquired right recognized as an [intangible asset](https://asc.understandingaccounting.org/glossary/i/#intangible-assets "Assets (not including financial assets) that lack physical substance. (The term intangible assets is used to refer to intangible assets other than goodwill.)") in accordance with paragraph [805-20-25-14](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-14) shall be amortized over the remaining contractual period of the contract in which the right was granted. An acquirer that subsequently sells a reacquired right to a third party shall include the carrying amount of the intangible asset in determining the gain or loss on the sale. ##### [805-20-35-3](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:63b01611637cc516aef4069db3d7ded8d782c0bead8b8420460b70f586da0bea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An acquirer shall develop a systematic and rational basis for subsequently measuring and accounting for 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.") depending on their nature. ##### [805-20-35-4](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:63d519670612f51557ab933e24a9a46d47e6fc2a5283f99aae4a6ae6a6675581 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At each subsequent reporting date, the acquirer shall measure an indemnification asset that was recognized in accordance with paragraphs [805-20-25-27 through 25-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-27) at the [acquisition date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree.") on the same basis as the indemnified liability or asset, subject to any contractual limitations on its amount, except as noted in paragraph [805-20-35-4B](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-4B), and, for an indemnification asset that is not subsequently measured at its fair value, management's assessment of the collectibility of the indemnification asset. ##### [805-20-35-4A](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-4A) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:1391a639791e6506a6a95ae4e99ec40bb3e28d209b20e75f4cb3f25fbf55affc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2012-06](https://asc.understandingaccounting.org/updates/asu-2012-06/). ##### [805-20-35-4B](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-4B) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:6c83bfb6ad8075df207b82cd716da31699dd0a2c2b767216147e43269584a795 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An indemnification asset recognized at the acquisition date in accordance with paragraphs [805-20-25-27 through 25-28](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-27) as a result of a government-assisted acquisition of a financial institution involving an indemnification agreement shall be subsequently measured on the same basis as the indemnified item. For example, if the expected cash flows on indemnified assets increase such that a previously recorded valuation allowance is reversed, an entity shall account for the associated decrease in the indemnification assets immediately in earnings. ##### [805-20-35-4C](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-4C) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:c99ae8c46615b451e7be70ea6a199155595e2b3e3868d2bb9d2b75942a86ba45 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 subsequently in accordance with the guidance for contingent consideration arrangements in paragraph [805-30-35-1](https://asc.understandingaccounting.org/asc/805/30/#805-30-35-1). #### Additional Guidance on Subsequent Measurement of Assets Acquired, Liabilities Assumed or Incurred, and Any Noncontrolling Interests in a Business Combination ##### [805-20-35-5](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:31bdd554b2c9255e0110468cbc640fb12ffa7a6d4e61a521472227a3c766d6b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional guidance on subsequently measuring and accounting for assets acquired in a business combination is addressed in Subtopic 350-30, which prescribes the accounting for [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.")[intangible assets](https://asc.understandingaccounting.org/glossary/i/#intangible-assets "Assets (not including financial assets) that lack physical substance. (The term intangible assets is used to refer to intangible assets other than goodwill.)") acquired in a business combination, including recognition of intangible assets used in research and development activities, regardless of whether those assets have an alternative future use, and their classification as indefinite-lived until the completion or abandonment of the associated research and development efforts. ##### [805-20-35-6](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:9fc4d9851ec605adda210e764772f9eec2febb4d62a01b1a41b848abb1606eea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Leasehold improvements acquired in a business combination shall be amortized over the shorter of the useful life of the assets and the remaining [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor.") at the date of acquisition. However, if the lease transfers ownership of the underlying asset to the lessee, or the lessee is reasonably certain to exercise an option to purchase the underlying asset, the lessee shall amortize the leasehold improvements to the end of their useful life. ##### [805-20-35-7](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:1898399200056a4af8d6760e372c591dd36bcca78424ad8ea582906de8a2c3de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 944on insurance provides guidance on the subsequent accounting for an insurance or [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") contract acquired in a business combination. ##### [805-20-35-8](https://asc.understandingaccounting.org/asc/805/20/#805-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:23:27.129Z to 2026-09-10T01:23:27.129Z Record version: sha256:5cb5ff5a123ac8f6ddb42c0c06731eac6ad19e7e905890ae4d0251778d6f0e9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Additional guidance on accounting for changes in a parent's ownership interest in a subsidiary after [control](https://asc.understandingaccounting.org/glossary/c/#control "The same as the meaning of controlling financial interest in paragraph 810-10-15-8.") is obtained is provided in paragraphs [810-10-45-22 through 45-24](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-22) and Example 1 (see paragraph [810-10-55-4B](https://asc.understandingaccounting.org/asc/810/10/#810-10-55-4B)).