# ASC 805-60-30: Business Combinations — Joint Venture Formations — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/60/#30-initial-measurement) 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): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:a3dc5c96bef398ce2b32450971d178d1cdd0e5e30ca5c5d1c2b12d03df58ddfc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/805/60/#30-initial-measurement) SEC content: no #### Identifiable Assets and Liabilities, and Any Noncontrolling Interest ##### [805-60-30-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:9c4266ea57c235f82dc35c5caf52990b02e75dd41b86b4e05a7bfde77177a546 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.") shall measure its [identifiable](https://asc.understandingaccounting.org/glossary/i/#identifiable "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.") assets and liabilities, and any [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."), recognized at the [formation date](https://asc.understandingaccounting.org/glossary/f/#formation-date "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.") in accordance with Subtopic 805-20. #### Goodwill ##### [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:827b48946840b12ad50152aa3aeaafff2541a970924abfc1c3d7a5760b2c7fe6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture shall apply the guidance in this paragraph to measure [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."), when applicable. A joint venture shall recognize goodwill, if any, upon formation, measured as the excess of (a) over (b): 1. a The formation-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 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). 2. b The net of the formation-date amounts of the identifiable assets and liabilities recognized by the joint venture and measured in accordance with Subtopic 805-20. ##### [805-60-30-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:7166452af16bf8370f3c6a98fe09c8f83eb02fa03128d03ecfeeb574c5316a51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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). #### Instruments, Contracts, and Share-Based Payment Awards Classified as Equity ##### [805-60-30-4](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:b59b5b7346755907240dca19adf4845e49f07f3c783ffb0bceb4210d1339e2af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [805-60-30-5](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-5)), 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. ##### [805-60-30-5](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:9f4ac2269c5c26becfa6bcbac2570cf74073cace1873c1cb41bce11a035437da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 allocated to preformation vesting (in accordance with paragraph [805-60-25-8](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-8)) 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. #### Liability-Classified and Asset-Classified Contingent Payments and Replacement Share-Based Payment Awards ##### [805-60-30-6](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:516c861e27e4fb72b87ff25d5768865ed81b0caa40db1194666eb5977b5dbb59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 [805-60-30-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-1). 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. ##### [805-60-30-7](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:01.305Z to 2026-09-10T01:26:01.305Z Record version: sha256:e776cc39a88095acaed616d5d878065c0ea189f118c199381e14d73627c8621c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 requirements in paragraphs [805-60-25-8](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-8) and [805-60-30-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-1)).