{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/805/60/#30-initial-measurement","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":"805-60","subtopic_title":"Joint Venture Formations","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":"Identifiable Assets and Liabilities, and Any Noncontrolling Interest","paragraphs":[{"citation":"805-60-30-1","para":"30-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-40CF983E-162F-4F73-B4B6-8ABDACF9E03C\"><span class=\"sfragment-source\">A <a href=\"/glossary/j/#joint-venture\" class=\"term\" title=\"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.\"><span>joint venture</span></a> shall measure its <a href=\"/glossary/i/#identifiable\" class=\"term\" title=\"An asset is identifiable if it meets either of the following criteria: It is separable, that is, capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability, regardless of whether the entity intends to do so. It arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.\"><span>identifiable</span></a> assets and liabilities, and any <a href=\"/glossary/n/#noncontrolling-interest\" class=\"term\" title=\"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.\"><span>noncontrolling interest</span></a>, recognized at the <a href=\"/glossary/f/#formation-date\" class=\"term\" title=\"The formation date of a joint venture is the date on which an entity initially meets the definition of a joint venture, which is not necessarily the legal entity formation date. The formation date is the measurement date for the formation transaction. If multiple arrangements are accounted for as a single transaction that establishes the formation of a joint venture, the formation date is the measurement date for all arrangements that form part of the single formation transaction.\"><span>formation date</span></a> in accordance with Subtopic <a altsource=\"GUID-4C20CF40-DD8D-4F61-94A7-35C477A5F96C.ditamap\" class=\"ditamap\">805-20</a>.</span></span></div></div></div>","snippet":"A joint venture shall measure its identifiable assets and liabilities, and any noncontrolling interest, recognized at the formation date in accordance with Subtopic 805-20.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9c4266ea57c235f82dc35c5caf52990b02e75dd41b86b4e05a7bfde77177a546","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9bb5cff047db6be4612f0540fb1275fef3093c459edb133d7c84a497c9b2f438","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"block":null,"heading":"Goodwill","paragraphs":[{"citation":"805-60-30-2","para":"30-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-57698DA7-441C-494F-8072-3E4E5D72D5DB\"><span class=\"sfragment-source\">A joint venture shall apply the guidance in this paragraph to measure <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>, when applicable. A joint venture shall recognize goodwill, if any, upon formation, measured as the excess of (a) over (b): </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"GUID-F878E5F2-F0FD-4A66-B114-AB7192DDF7BF\"><span class=\"sfragment-source\">The formation-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 the joint venture as a whole. The formation-date fair value of the joint venture as a whole shall equal the fair value of 100 percent of the joint venture’s equity (net assets) immediately following formation (including any noncontrolling interest in the net assets recognized by the joint venture).</span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"GUID-68CDDEF4-4616-4670-A48E-FE56D1554A57\"><span class=\"sfragment-source\">The net of the formation-date amounts of the identifiable assets and liabilities recognized by the joint venture and measured in accordance with Subtopic <a altsource=\"GUID-4C20CF40-DD8D-4F61-94A7-35C477A5F96C.ditamap\" class=\"ditamap\">805-20</a>.</span></span></div></li></ol></div></div></div>","snippet":"A joint venture shall apply the guidance in this paragraph to measure goodwill, when applicable. A joint venture shall recognize goodwill, if any, upon formation, measured as the excess of (a) over (b):\n(a) The formation…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:827b48946840b12ad50152aa3aeaafff2541a970924abfc1c3d7a5760b2c7fe6","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"citation":"805-60-30-3","para":"30-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-BDDBC4AE-EFD9-45E5-873F-5D533527E7E1\"><span class=\"sfragment-source\">Upon formation, a joint venture shall recognize the amount of its identifiable net assets recognized in excess of the fair value of the joint venture as a whole, if any, as an adjustment to additional paid-in capital (or other similar equity account, such as members’ equity).</span></span></div></div></div>","snippet":"Upon formation, a joint venture shall recognize the amount of its identifiable net assets recognized in excess of the fair value of the joint venture as a whole, if any, as an adjustment to additional paid-in capital (or…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7166452af16bf8370f3c6a98fe09c8f83eb02fa03128d03ecfeeb574c5316a51","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0f9f9a1f7e80d2eb3903055876431f6fea1684ec3c38a5ea228cc85ff7589799","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"block":null,"heading":"Instruments, Contracts, and Share-Based Payment Awards Classified as Equity","paragraphs":[{"citation":"805-60-30-4","para":"30-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-0536E897-F2EA-42AD-95AD-011903C2FD26\"><span class=\"sfragment-source\">The amount of any separately recognized equity-classified instruments or contracts issued by a joint venture as part of the formation transaction, other than equity-classified replacement share-based payment awards (see paragraph <a href=\"/asc/805/60/#805-60-30-5\" class=\"xref\">805-60-30-5</a>), shall be accounted for as a reallocation of additional paid-in capital (or other similar equity account, such as members’ equity) and shall not affect the total amount of equity or goodwill recognized by the joint venture upon formation.</span></span></div></div></div>","snippet":"The amount of any separately recognized equity-classified instruments or contracts issued by a joint venture as part of the formation transaction, other than equity-classified replacement share-based payment awards (see …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b59b5b7346755907240dca19adf4845e49f07f3c783ffb0bceb4210d1339e2af","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"citation":"805-60-30-5","para":"30-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-20A95B82-374C-4E1D-B872-B94306EE9B9C\"><span class=\"sfragment-source\">A joint venture shall initially measure equity-classified replacement share-based payment awards at the fair-value-based measurement method described in Topic <a altsource=\"GUID-37C8A489-7666-4EF7-AB4F-17B284EC8C1C.ditamap\" class=\"ditamap\">718</a> on stock compensation. The fair-value-based amount allocated to preformation vesting (in accordance with paragraph <a href=\"/asc/805/60/#805-60-25-8\" class=\"xref\">805-60-25-8</a>) of any replacement share-based payments classified as equity shall be recognized as a reallocation of additional paid-in capital (or other similar equity account, such as members’ equity) and shall not affect the total amount of equity or goodwill recognized by the joint venture upon formation.</span></span></div></div></div>","snippet":"A joint venture shall initially measure equity-classified replacement share-based payment awards at the fair-value-based measurement method described in Topic 718 on stock compensation. The fair-value-based amount alloca…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f4ac2269c5c26becfa6bcbac2570cf74073cace1873c1cb41bce11a035437da","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f9585b97c7140d5d945cc19c43e49e41b7c7fd427112b9336f6223b043f81a16","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"block":null,"heading":"Liability-Classified and Asset-Classified Contingent Payments and Replacement Share-Based Payment Awards","paragraphs":[{"citation":"805-60-30-6","para":"30-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-2F1051AF-15E9-44E1-8511-DF57A5FB4F77\"><span class=\"sfragment-source\">A joint venture shall initially measure any contingent payment arrangements between the joint venture and its venturers that are classified as liabilities (or assets), other than replacement share-based payment awards, in accordance with paragraph <a href=\"/asc/805/60/#805-60-30-1\" class=\"xref\">805-60-30-1</a>. A joint venture shall not account for those arrangements generated as a result of the joint venture formation as contingent consideration or as an assumed contingent consideration arrangement.</span></span></div></div></div>","snippet":"A joint venture shall initially measure any contingent payment arrangements between the joint venture and its venturers that are classified as liabilities (or assets), other than replacement share-based payment awards, i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:516c861e27e4fb72b87ff25d5768865ed81b0caa40db1194666eb5977b5dbb59","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},{"citation":"805-60-30-7","para":"30-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"GUID-EF34440F-0CC7-4467-8441-860642C51C55\"><span class=\"sfragment-source\">A joint venture shall initially measure liability-classified replacement share-based payment awards using the fair-value-based measurement method described in Topic <a altsource=\"GUID-37C8A489-7666-4EF7-AB4F-17B284EC8C1C.ditamap\" class=\"ditamap\">718</a> on stock compensation (consistent with the requirements in paragraphs <a href=\"/asc/805/60/#805-60-25-8\" class=\"xref\">805-60-25-8</a> and <a href=\"/asc/805/60/#805-60-30-1\" class=\"xref\">805-60-30-1</a>). </span></span></div></div></div>","snippet":"A joint venture shall initially measure liability-classified replacement share-based payment awards using the fair-value-based measurement method described in Topic 718 on stock compensation (consistent with the requirem…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e776cc39a88095acaed616d5d878065c0ea189f118c199381e14d73627c8621c","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f7850f1343f2937761caf5c3edfaf8c3a33761aa0a1e0e1de3e471231122896","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a3dc5c96bef398ce2b32450971d178d1cdd0e5e30ca5c5d1c2b12d03df58ddfc","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a3dc5c96bef398ce2b32450971d178d1cdd0e5e30ca5c5d1c2b12d03df58ddfc","downloaded_from":"2026-09-10T01:26:01.305Z","last_downloaded_at":"2026-09-10T01:26:01.305Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147476184","source_sha256":"4acd41fb8b1fa52f0e516c023a9afd5cc4146f8ae5a5d3907a8856a8244e2d42"}}