{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/805/50/#55-implementation-guidance-and-illustrations","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":"805-50","subtopic_title":"Related Issues","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"805-50-55-1","para":"55-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_7EFCDCD2-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Example illustrates the application of the relative fair value method when assets are acquired in a group outside a business combination as discussed in paragraph <a href=\"/asc/805/50/#805-50-30-3\" class=\"xref\">805-50-30-3</a>. </span></span> <ul class=\"ul simple\" id=\"SL6831961-166255__GUID-B8A867C3-5ACB-45AE-89AF-F0E284C42368\"> <li class=\"li\" id=\"SL6831961-166255__SL6831964-166255\"> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_7EFCDDFD-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">On January 1, 20X9, Entity A purchased land, building, and equipment for $500,000 in cash. Transaction costs of $25,000 were incurred.</span></span> </div> </li> <li class=\"li\" id=\"SL6831961-166255__SL6831965-166255\"> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_7EFCDEC8-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">To allocate the cost, the fair value of the individual assets is determined based on the guidance in Topic <a altsource=\"GUID-0C8D9651-1182-4A36-827F-0C71E4C9D9F4.ditamap\" class=\"ditamap\">820</a>.</span></span> </div> </li> <li class=\"li\" id=\"SL6831961-166255__SL6831967-166255\"> <div class=\"p\"> <div class=\"fig figure fignone\"> <img src=\"/asc-img/GUID-B895154A-6A30-4326-A060-4EA6102C3427-low.gif\" altsource=\"GUID-B895154A-6A30-4326-A060-4EA6102C3427-low.gif\" alt=\" \" loading=\"lazy\"> <span class=\"sfragment\" id=\"sfr_7EFCE301-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"></span></span> <div class=\"figcaption\">\tAsset Fair Value (Based on Measurement Guidance in Topic 820) Percent of Total Fair Value × Purchase Price + Transaction Costs = Allocated Cost of Assets Acquired + Transaction Costs Land \" $350,000 \" 61%\t(a) \" $525,000 \" \" $319,565 \" Building \" 175,000 \" 30%\t(b) \" 525,000 \" \" 159,783 \" Equipment \" 50,000 \" 9%\t(c) \" 525,000 \" \" 45,652 \" Total \" $575,000 \" 100% \" $525,000 \" (a)\t\"$350,000/$575,000 = 61%\" (b)\t\"$175,000/$575,000 = 30%\" (c)\t\"$50,000/$575,000 = 9%\" </div></div> </div> </li> </ul> </div> </div>","snippet":"This Example illustrates the application of the relative fair value method when assets are acquired in a group outside a business combination as discussed in paragraph 805-50-30-3.\nOn January 1, 20X9, Entity A purchased …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0862c32d2a3b3ba7c09989e2441d35a41459a25d2651f859a67e261ac5118e18","downloaded_from":"2026-09-10T01:25:20.275Z","last_downloaded_at":"2026-09-10T01:25:20.275Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479908","source_sha256":"c68f3bbdf75d043d506fde3443bde83defc66270a35b7693c1b5e064c4261899"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0c4d3ca9b69455b16240f20cda9a3b7448d91a9751ece3b49f817cb75b809b8","downloaded_from":"2026-09-10T01:25:20.275Z","last_downloaded_at":"2026-09-10T01:25:20.275Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479908","source_sha256":"c68f3bbdf75d043d506fde3443bde83defc66270a35b7693c1b5e064c4261899"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dac9b6d57fda7dca3daf8d2237749196cdd05f8045fa3d96c9a559ffe5cb1656","downloaded_from":"2026-09-10T01:25:20.275Z","last_downloaded_at":"2026-09-10T01:25:20.275Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479908","source_sha256":"c68f3bbdf75d043d506fde3443bde83defc66270a35b7693c1b5e064c4261899"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dac9b6d57fda7dca3daf8d2237749196cdd05f8045fa3d96c9a559ffe5cb1656","downloaded_from":"2026-09-10T01:25:20.275Z","last_downloaded_at":"2026-09-10T01:25:20.275Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479908","source_sha256":"c68f3bbdf75d043d506fde3443bde83defc66270a35b7693c1b5e064c4261899"}}