# ASC 805-30-05: Business Combinations — Goodwill or Gain from Bargain Purchase, Including Consideration Transferred — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 805-30-05: 05 Overview and Background

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##### [805-30-05-1](https://asc.understandingaccounting.org/asc/805/30/#805-30-05-1)

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This Subtopic provides guidance on one aspect of the acquisition method (as described in paragraph [805-10-05-4](https://asc.understandingaccounting.org/asc/805/10/#805-10-05-4))—the recognition and measurement of either [goodwill](https://asc.understandingaccounting.org/glossary/g/#goodwill "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.") or a gain from a bargain purchase.

##### [805-30-05-2](https://asc.understandingaccounting.org/asc/805/30/#805-30-05-2)

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The remaining aspects of the acquisition method are addressed in Subtopics 805-10 and 805-20. Subtopic 805-20 addresses the recognition and measurement of identifiable assets acquired, 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."). Subtopic 805-10 addresses all of the following:

1.  a
    
    Identification of 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.")
    
2.  b
    
    Determination of the [acquisition date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree.")
    
3.  c
    
    Particular types of [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.")
    
4.  d
    
    Measurement period
    
5.  e
    
    Determination of what is part of a business combination.