# ASC 805-50-05: Business Combinations — Related Issues — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/50/#05-overview-and-background) 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): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:3841992e2f6fb80522e9c12edf2b62a180a29868e587abed4ed1a87df58be9e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-50-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/805/50/#05-overview-and-background) SEC content: no ##### [805-50-05-1](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:0080fda9d49a92d0cf4c4ba5dd0c37a3181ac2174800e0c6e5eac0cf37e6fb2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-17](https://asc.understandingaccounting.org/updates/asu-2014-17/). ##### [805-50-05-2](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:4912364bb70129a63fee26a476bcfaf1d3d4ddeb431094d871c907af1322cf14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic presents guidance in the following Subsections: 1. a General 2. b Acquisition of Assets Rather than a Business 3. c Transactions Between Entities Under Common Control 4. d Formation of a Master Limited Partnership 5. e Pushdown Accounting. ### Acquisition of Assets Rather than a Business ##### [805-50-05-3](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:30b4654866e0821836e44a185129d26f2b7cc75ddbd2b5097510e86389fb739f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Acquisition of Assets Rather than a Business Subsections address a transaction in which the assets acquired and liabilities assumed do not constitute a [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") and require such a transaction to be accounted for as an asset acquisition. However, these Subsections do not provide guidance for the primary beneficiary of a variable interest entity (VIE) if the VIE does not constitute a business. ### Transactions between Entities under Common Control ##### [805-50-05-4](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:931960019337d8f8e80da19e5fc87690a2caac5fad1ce62487a85973bb85ea35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As noted in paragraph [805-10-15-4(c)](https://asc.understandingaccounting.org/asc/805/10/#805-10-15-4), the guidance related to [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.") does not apply to combinations between entities or [businesses](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") under common control. ##### [805-50-05-5](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:d417bcea7eea758ebc4bd9d56899e511db49f0fd1a14f3d7401fb2a19ab9ce24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some transfers of net assets or exchanges of shares between entities under common control result in a change in the reporting entity. In practice, the method that many entities have used to account for those transactions is similar to the pooling-of-interests method. The Transactions Between Entities Under Common Control Subsections provide guidance on preparing financial statements and related disclosures for the entity that receives the net assets. ### Formation of a Master Limited Partnership ##### [805-50-05-6](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:9b2d9267aaf30a2a4b0e33f8ba60b1f0b61b3a5220ba65712e173e29f08a5eb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Formation of a Master Limited Partnership Subsections provide guidance on when a new basis of accounting may be recorded for the assets and liabilities of a master limited partnership. #### Master Limited Partnership Transactions ##### [805-50-05-7](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:e5dd24b0c99fecb4304ca66aa6d1acb9ef039ede2a481cfaf3c005f37d00acc0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Master limited partnerships are partnerships in which interests are publicly traded. Most master limited partnerships are formed from assets in existing businesses. Typically, the general partner of the master limited partnership is affiliated with the existing [business](https://asc.understandingaccounting.org/glossary/b/#business "Paragraphs 805-10-55-3A805-10-55-4805-10-55-5805-10-55-6 and 805-10-55-8805-10-55-9 define what is considered a business.") (that is, the master limited partnership is usually operated as an extension of or complementary to the business of the general partner). The purposes for forming a master limited partnership vary. They can be formed to realize the value of undervalued assets, to pass income and tax-deductible losses directly through to owners, to raise capital, to combine several existing partnerships, or as a vehicle to enable entities to sell, spin off, or liquidate existing operations. A master limited partnership may be created in a variety of ways. Whether a particular transaction 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.") that should be accounted for using the acquisition method or a transaction between entities under common control can be determined only after a careful analysis of all facts and circumstances. The Formation of a Master Limited Partnership Subsections identify specific transactions involving master limited partnerships and provide guidance on whether a new basis of accounting is appropriate. ##### [805-50-05-8](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:80b525fdf7e5aad002a0cb0dfb91da4a424d840a14cf98450e0166ac45d28522 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-17](https://asc.understandingaccounting.org/updates/asu-2014-17/). ### Pushdown Accounting ##### [805-50-05-9](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:54.543Z to 2026-09-10T01:24:54.543Z Record version: sha256:6cf7faaf94ed03b65fe0d388bcf9a1fb08789daa775aa3c041f0a9303c9c6015 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Pushdown Accounting Subsections addresses whether and at what threshold an [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.") that is a business or [nonprofit activity](https://asc.understandingaccounting.org/glossary/n/#nonprofit-activity "An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing benefits, other than goods or services at a profit or profit equivalent, as a fulfillment of an entity's purpose or mission (for example, goods or services to beneficiaries, customers, or members). As with a not-for-profit entity, a nonprofit activity possesses characteristics that distinguish it from a business or a for-profit business entity.") can apply [pushdown accounting](https://asc.understandingaccounting.org/glossary/p/#pushdown-accounting "Use of the acquirer's basis in the preparation of the acquiree's separate financial statements.") in its separate financial statements.