{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/805/30/#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":"805","topic_title":"Business Combinations","subtopic":"805-30","subtopic_title":"Goodwill or Gain from Bargain Purchase, Including Consideration Transferred","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Goodwill Recognition","paragraphs":[{"citation":"805-30-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A3C3A-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"> <span class=\"principle\">The <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 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> as of 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>, measured as described in paragraph <a href=\"/asc/805/30/#805-30-30-1\" class=\"xref\">805-30-30-1</a>. </span> </span></span> </div> </div>","snippet":"The acquirer shall recognize goodwill as of the acquisition date, measured as described in paragraph 805-30-30-1.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2f86d17edfacf8fcd18b82305459d8670aeca7fb568a8e7d1ac9afd48efbbe5b","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e74cd6a3e95cbb66eafb8cfb5d7ab7bf537abd6e207d94381fccc0f1110f907c","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"block":null,"heading":"Gain from Bargain Purchase","paragraphs":[{"citation":"805-30-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A3D66-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Occasionally, an acquirer will make a bargain purchase, which is 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> in which the amount in paragraph <a href=\"/asc/805/30/#805-30-30-1\" class=\"xref\">805-30-30-1(b)</a> exceeds the aggregate of the amounts specified in (a) in that paragraph. </span></span> <span class=\"sfragment\" id=\"sfr_7C3A3E51-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If that excess remains after applying the requirements in paragraph <a href=\"/asc/805/30/#805-30-25-4\" class=\"xref\">805-30-25-4</a>, the acquirer shall recognize the resulting gain in earnings on the acquisition date. The gain shall be attributed to the acquirer. Example 1 (see paragraph <a href=\"/asc/805/30/#805-30-55-14\" class=\"xref\">805-30-55-14</a>) provides an illustration of this guidance. </span></span> </div> </div>","snippet":"Occasionally, an acquirer will make a bargain purchase, which is a business combination in which the amount in paragraph 805-30-30-1(b) exceeds the aggregate of the amounts specified in (a) in that paragraph. If that exc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4e66e352efd3c8d573d70ec1b919bcd9b78dd677f8b74dd67bd5ae328c918180","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"citation":"805-30-25-3","para":"25-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A3F32-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A bargain purchase might happen, for example, in a business combination that is a forced sale in which the seller is acting under compulsion. However, the recognition or measurement exceptions for particular items identified in paragraphs <a href=\"/asc/805/20/#805-20-25-16\" class=\"xref\">805-20-25-16</a>, and <a href=\"/asc/805/20/#805-20-30-10\" class=\"xref\">805-20-30-10</a> also may result in recognizing a gain (or change the amount of a recognized gain) on a bargain purchase. </span></span> </div> </div>","snippet":"A bargain purchase might happen, for example, in a business combination that is a forced sale in which the seller is acting under compulsion. However, the recognition or measurement exceptions for particular items identi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3dfa670cd1bb237c33bc120847b54f048c73f94e18062c4058c7cb0f9d710329","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"citation":"805-30-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A4013-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Before recognizing a gain on a bargain purchase, the acquirer shall reassess whether it has correctly identified all of the assets acquired and all of the liabilities assumed and shall recognize any additional assets or liabilities that are identified in that review. </span></span>See paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/805/30/#805-30-30-4\" class=\"xref\">805-30-30-4 through 30-6</a></div> for guidance on the review of measurement procedures in connection with a reassessment required by this paragraph.</div> </div>","snippet":"Before recognizing a gain on a bargain purchase, the acquirer shall reassess whether it has correctly identified all of the assets acquired and all of the liabilities assumed and shall recognize any additional assets or …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbfce1032993c2936d9d3fff806dd001fbd289266917fc8452722d9599d028c1","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0920b1e520dda214988a87b4a4b1abb596695b82ad3f42f201d27a7acb551ab0","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"block":null,"heading":"Contingent Consideration","paragraphs":[{"citation":"805-30-25-5","para":"25-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A40E9-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The consideration the acquirer transfers in exchange for the <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> includes any asset or liability resulting from a <a href=\"/glossary/c/#contingent-consideration\" class=\"term\" title=\"Usually an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met. However, contingent consideration also may give the acquirer the right to the return of previously transferred consideration if specified conditions are met.\"><span>contingent consideration</span></a> arrangement. The acquirer shall recognize the acquisition-date <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> of contingent consideration as part of the consideration transferred in exchange for the acquiree. </span></span> </div> </div>","snippet":"The consideration the acquirer transfers in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The acquirer shall recognize the acquisition-date fair value of…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d6cf1625d97c4e90f6edbf810a56c202eefc7323926ef874fcfe6be340d53b61","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"citation":"805-30-25-6","para":"25-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A41BF-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The acquirer shall classify an obligation to pay contingent consideration as a liability or as equity in accordance with Subtopics <a altsource=\"GUID-D6849FE8-27A8-4E26-B715-0C08913C223E.ditamap\" class=\"ditamap\">480-10</a> and <a altsource=\"GUID-661263AB-F547-49BF-BEA8-1701C5581479.ditamap\" class=\"ditamap\">815-40</a> or other applicable generally accepted accounting principles (GAAP). For example, Subtopic <a altsource=\"GUID-D6849FE8-27A8-4E26-B715-0C08913C223E.ditamap\" class=\"ditamap\">480-10</a> provides guidance on whether to classify as a liability a contingent consideration arrangement that is, in substance, a put option written by the acquirer on the market price of the acquirer's shares issued in the business combination. </span></span> </div> </div>","snippet":"The acquirer shall classify an obligation to pay contingent consideration as a liability or as equity in accordance with Subtopics 480-10 and 815-40 or other applicable generally accepted accounting principles (GAAP). Fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:39422ef18007a1d6f73026ed69c8cef07182ce36d4dee00fc5af4c94584e91c4","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},{"citation":"805-30-25-7","para":"25-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7C3A42BC-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The acquirer shall classify as an asset a right to the return of previously transferred consideration if specified conditions are met. </span></span> </div> </div>","snippet":"The acquirer shall classify as an asset a right to the return of previously transferred consideration if specified conditions are met.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:da44d0a2293a5b46d4a898b482465040d5a48da82bbf9773462e49cc42000234","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3d2521be4653e9c66b5e928b1b0ecfd216c1043cb8a3ad2e3408c1aa7b13e9f","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9fc0ee0bd8ed6d1af3b75c267a07a86700370abf044f3d1e2909337eaa988a87","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9fc0ee0bd8ed6d1af3b75c267a07a86700370abf044f3d1e2909337eaa988a87","downloaded_from":"2026-09-10T01:24:11.890Z","last_downloaded_at":"2026-09-10T01:24:11.890Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479668","source_sha256":"e63b827c4bd16cbe1917e2f045e540ba202a0f123ccb671e36f3cbd5023243d7"}}