# ASC 805-50-15: Business Combinations — Related Issues — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/50/#15-scope-and-scope-exceptions) 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): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:cb506faa8b1bcfbc0f0e271531c8885578bca1545a8e2ce2d1deafb6dd4f463e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-50-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/805/50/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [805-50-15-1](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:f9d87d2c25eb731f9d25d9869a36bfa3b0d2b18f5ada21404446e2e9412e9612 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic has its own discrete scope, which is separate and distinct from the pervasive scope for this Topic as outlined in Section 805-10-15. ### Acquisition of Assets Rather than a Business #### Entities ##### [805-50-15-2](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:b2987633d02466468ee82b9cf3679437f2136cdf79b65e069c09f0a9af2066ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Acquisition of Assets Rather than a Business Subsections applies to all entities. #### Transactions ##### [805-50-15-3](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:29b10eb1e495ceff3b6cece3218c5051f3de32dfb884ed4e9e17ceb974495423 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Acquisition of Assets Rather than a Business Subsections applies to a transaction or event in which 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."). ##### [805-50-15-4](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:c4597ab2c24d1f11baab4ecb4f8c7a90d3b53c0587a7f985a53c436501cc3f36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Acquisition of Assets Rather than a Business Subsections does not apply to the initial measurement and recognition by a primary beneficiary of the assets and liabilities of a variable interest entity (VIE) when the VIE does not constitute a business. Guidance for such a VIE is provided in Section 810-10-30. ##### [805-50-15-4A](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-4A) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:031853266b40bd7edf285a8436e2445c58c5462142f4c13d4906dc2ff70496af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Acquisition of Assets Rather than a Business Subsections does not apply to the initial measurement and recognition of assets and liabilities by a [joint venture](https://asc.understandingaccounting.org/glossary/j/#joint-venture "An entity owned and operated by a small group of businesses (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a joint venture frequently is to share risks and rewards in developing a new market, product, or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a joint venture. The ownership of a joint venture seldom changes, and its equity interests usually are not traded publicly. A minority public ownership, however, does not preclude an entity from being a joint venture. As distinguished from a corporate joint venture, a joint venture is not limited to corporate entities.") upon formation. Guidance for joint venture formations is provided in Subtopic 805-60. ### Transactions between Entities under Common Control #### Entities ##### [805-50-15-5](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:8ada56a08497e43c26dfe12f32af04e57986c895631c4aaa92741c859a9733d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Transactions between Entities under Common Control Subsections applies to all entities. #### Transactions ##### [805-50-15-6](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:66254042f13e66fbd2b858648f63add079decd67240b658b2f7115a305aa3b73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Transactions between Entities under Common Control Subsections applies 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. The following are examples of those types of transactions: 1. a An entity charters a newly formed entity and then transfers some or all of its net assets to that newly chartered entity. 2. b A parent transfers the net assets of a wholly owned subsidiary into the parent and liquidates the subsidiary. That transaction is a change in legal organization but not a change in the reporting entity. 3. c A parent transfers its controlling interest in several partially owned subsidiaries to a new wholly owned subsidiary. That also is a change in legal organization but not in the reporting entity. 4. d A parent exchanges its ownership interests or the net assets of a wholly owned subsidiary for additional shares issued by the parent's less-than-wholly-owned subsidiary, thereby increasing the parent's percentage of ownership in the less-than-wholly-owned subsidiary but leaving all of the existing [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.") outstanding. 5. e A parent's less-than-wholly-owned subsidiary issues its shares in exchange for shares of another subsidiary previously owned by the same parent, and the noncontrolling shareholders are not party to the exchange. That is not 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.") from the perspective of the parent. 6. f A limited liability company is formed by combining entities under common control. 7. g Two or more [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) that are effectively controlled by the same board members transfer their net assets to a new entity, dissolve the former entities, and appoint the same board members to the newly combined entity. ##### [805-50-15-6A](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-6A) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:66662f7b39af560f92e320d010e307e0442beabc0d5295a84581e7b0e0dbe6d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Transactions between Entities under Common Control Subsections does not apply to the initial measurement by a primary beneficiary of the assets, liabilities, and noncontrolling interests of a VIE if the primary beneficiary of a VIE and the VIE are under common control. Guidance for such a VIE is provided in Section 810-10-30. ##### [805-50-15-6B](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-6B) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:af14f3450563151f2deba73b65ce56afe819b88adaa1facf5c32c80f41c969d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Mergers and acquisitions between or among two or more NFPs, all of which benefit a particular group of citizens, shall not be considered common control transactions solely because those entities benefit a particular group. The mission, operations, and historical sources of support of two or more NFPs may be closely linked to benefiting a particular group of citizens. However, that group neither owns nor controls the NFPs. ### Formation of a Master Limited Partnership #### Entities ##### [805-50-15-7](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:12c8a1a323567c7c1ce1f43b9ef9f33378d51b085e86fc564ddc7f979af7a669 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Formation of a Master Limited Partnership Subsections applies to a publicly traded master limited partnership formed from assets of existing [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."). Paragraph [805-50-05-7](https://asc.understandingaccounting.org/asc/805/50/#805-50-05-7) explains that, typically, the general partner of the master limited partnership is affiliated with the existing business. ##### [805-50-15-8](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:5a7e3c7898a0ef3193626178f7a6197ac038f9cb3093f49486405e602c10b890 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/). ##### [805-50-15-9](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:38e978d04d991c76cfef85b716d372a3e7ff1665c9f759194f347dc8fcb08505 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 ##### [805-50-15-10](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:c1e69b80be6c02001813ab60ec6f68e42184e2f9e7143671d4cb7c535d05ab9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Pushdown Accounting Subsections applies to the separate financial statements of 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.") and its subsidiaries. #### Transactions ##### [805-50-15-11](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:24:58.341Z to 2026-09-10T01:24:58.341Z Record version: sha256:2cb130dc6c02e92f738526d1e4607f6bca4f8d3b8b002e1587fa3a75fbf54e76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Pushdown Accounting Subsections does not apply to transactions in paragraph [805-10-15-4](https://asc.understandingaccounting.org/asc/805/10/#805-10-15-4).