# ASC 805-30-25: Business Combinations — Goodwill or Gain from Bargain Purchase, Including Consideration Transferred — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/30/#25-recognition) 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): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:9fc0ee0bd8ed6d1af3b75c267a07a86700370abf044f3d1e2909337eaa988a87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/805/30/#25-recognition) SEC content: no #### Goodwill Recognition ##### [805-30-25-1](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:2f86d17edfacf8fcd18b82305459d8670aeca7fb568a8e7d1ac9afd48efbbe5b 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 recognize [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.") as of the [acquisition date](https://asc.understandingaccounting.org/glossary/a/#acquisition-date "The date on which the acquirer obtains control of the acquiree."), measured as described in paragraph [805-30-30-1](https://asc.understandingaccounting.org/asc/805/30/#805-30-30-1). #### Gain from Bargain Purchase ##### [805-30-25-2](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:4e66e352efd3c8d573d70ec1b919bcd9b78dd677f8b74dd67bd5ae328c918180 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Occasionally, an acquirer will make a bargain purchase, which is 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 which the amount in paragraph [805-30-30-1(b)](https://asc.understandingaccounting.org/asc/805/30/#805-30-30-1) exceeds the aggregate of the amounts specified in (a) in that paragraph. If that excess remains after applying the requirements in paragraph [805-30-25-4](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-4), 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 [805-30-55-14](https://asc.understandingaccounting.org/asc/805/30/#805-30-55-14)) provides an illustration of this guidance. ##### [805-30-25-3](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:3dfa670cd1bb237c33bc120847b54f048c73f94e18062c4058c7cb0f9d710329 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [805-20-25-16](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-16), and [805-20-30-10](https://asc.understandingaccounting.org/asc/805/20/#805-20-30-10) also may result in recognizing a gain (or change the amount of a recognized gain) on a bargain purchase. ##### [805-30-25-4](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:fbfce1032993c2936d9d3fff806dd001fbd289266917fc8452722d9599d028c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. See paragraphs [805-30-30-4 through 30-6](https://asc.understandingaccounting.org/asc/805/30/#805-30-30-4) for guidance on the review of measurement procedures in connection with a reassessment required by this paragraph. #### Contingent Consideration ##### [805-30-25-5](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:d6cf1625d97c4e90f6edbf810a56c202eefc7323926ef874fcfe6be340d53b61 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The consideration the acquirer transfers in exchange for 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.") includes any asset or liability resulting from a [contingent consideration](https://asc.understandingaccounting.org/glossary/c/#contingent-consideration "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.") arrangement. The acquirer shall recognize the acquisition-date [fair value](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.") of contingent consideration as part of the consideration transferred in exchange for the acquiree. ##### [805-30-25-6](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:39422ef18007a1d6f73026ed69c8cef07182ce36d4dee00fc5af4c94584e91c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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). For example, Subtopic 480-10 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. ##### [805-30-25-7](https://asc.understandingaccounting.org/asc/805/30/#805-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:11.890Z to 2026-09-10T01:24:11.890Z Record version: sha256:da44d0a2293a5b46d4a898b482465040d5a48da82bbf9773462e49cc42000234 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall classify as an asset a right to the return of previously transferred consideration if specified conditions are met.