# ASC 805-60: Business Combinations — Joint Venture Formations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/60/) 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): 2026-09-10T01:25:44.706Z to 2026-09-10T01:26:14.808Z Record version: sha256:c974381c23fb93a1ce10115f12c328ed5071366216357fd42abb05514b6b419e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60: Business Combinations — Joint Venture Formations ### Machine-generated study aids ```json { "summary": "ASC 805-60 governs how a newly formed joint venture (or corporate joint venture) accounts for its own formation in its separate financial statements. The joint venture must establish a new basis of accounting at the formation date, recognizing and measuring identifiable assets, liabilities, and any noncontrolling interest under Subtopic 805-20, but without identifying an acquirer. Goodwill, if any, is the excess of the formation-date fair value of the joint venture as a whole over the net of the identifiable assets and liabilities recognized; any excess of net assets over that fair value is credited to additional paid-in capital rather than recognized as a bargain purchase gain.", "key_points": [ "A joint venture applies a new basis of accounting upon formation, treating the transaction as a transfer of net assets to a new reporting entity whose history begins at formation, and does not identify an acquirer (805-60-05-2; 805-60-25-2).", "The formation date is the date the entity first meets the definition of a joint venture (not necessarily the legal formation date), and a single formation date serves as the measurement date for all contributions and for any multiple arrangements accounted for as one transaction (805-60-25-3 through 25-5).", "New basis accounting applies whether or not the contributed assets constitute a business, and identifiable assets, liabilities, and any NCI are recognized and measured under Subtopic 805-20 (805-60-25-10 through 25-11; 805-60-30-1).", "Goodwill equals the formation-date fair value of the joint venture as a whole (100% of equity immediately after formation, including NCI) less the net of the recognized identifiable assets and liabilities; more than insignificant goodwill is unusual if the contributed assets are not a business (805-60-25-13; 805-60-30-2).", "Any excess of identifiable net assets over the fair value of the joint venture as a whole is recorded as an adjustment to additional paid-in capital (or members' equity), not as a gain (805-60-30-3).", "Equity-classified instruments issued in the formation and the preformation-vesting portion of equity-classified replacement share-based payment awards are reallocations of additional paid-in capital and do not change total equity or goodwill; replacement awards are split between preformation vesting and postformation compensation cost under 805-30-30-9 through 30-13 (805-60-25-8; 805-60-30-4 through 30-5).", "The measurement period guidance in 805-10-25-13 through 25-19 may be applied if initial accounting is incomplete, with disclosures required by 805-60-50-3; period-of-formation disclosures include the formation date, purpose, fair value of the joint venture as a whole, major classes of assets and liabilities, and qualitative goodwill factors (805-60-25-14; 805-60-50-2)." ], "categories": [ "Business combinations", "Initial measurement", "Intangibles and goodwill", "Disclosure" ], "audience_level": "advanced", "student_note": "Added by ASU 2023-05, this Subtopic finally answers a long-unsettled question: a joint venture steps up all contributed net assets to fair value in its own financial statements even though no acquirer exists. The classic trap is applying the acquisition method mechanically — there is no acquirer, no bargain purchase gain (the excess goes to APIC), no settlement-of-preexisting-relationship or acquisition-cost analogies (805-60-25-7), and goodwill is derived from the fair value of the venture as a whole rather than consideration transferred.", "related_topics": [ "805-10", "805-20", "805-30", "805-50", "350-20", "718" ], "key_concepts": [ "joint venture formation", "new basis of accounting", "formation date", "fair value of the joint venture as a whole", "goodwill", "additional paid-in capital adjustment", "replacement share-based payment awards", "measurement period" ] } ``` Source downloaded (UTC): 2026-09-10T01:25:44.706Z to 2026-09-10T01:25:44.706Z Record version: sha256:d03c45f98c54bcdc56d3c846ca9baa201671db86171ccf36c8d4702f3d51ea87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/805/60/#00-status) SEC content: no ##### [805-60-00-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:44.706Z to 2026-09-10T01:25:44.706Z Record version: sha256:30ae0a2ff487cb144515509e93c04294213f688805232d118df1556b31b7f9b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
AcquireeAddedAccounting Standards Update No. 2023-0508/23/2023
AcquirerAmendedAccounting Standards Update No. 2025-0305/12/2025
AcquirerAddedAccounting Standards Update No. 2023-0508/23/2023
Acquisition by a Not-for-Profit EntityAddedAccounting Standards Update No. 2023-0508/23/2023
Acquisition DateAddedAccounting Standards Update No. 2023-0508/23/2023
BusinessAddedAccounting Standards Update No. 2023-0508/23/2023
Business CombinationAddedAccounting Standards Update No. 2023-0508/23/2023
Control (3rd def.)AddedAccounting Standards Update No. 2023-0508/23/2023
Corporate Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Equity InterestsAddedAccounting Standards Update No. 2023-0508/23/2023
Fair Value (2nd def.)AddedAccounting Standards Update No. 2023-0508/23/2023
Financial AssetAddedAccounting Standards Update No. 2023-0508/23/2023
Formation DateAddedAccounting Standards Update No. 2023-0508/23/2023
GoodwillAddedAccounting Standards Update No. 2023-0508/23/2023
IdentifiableAddedAccounting Standards Update No. 2023-0508/23/2023
Intangible AssetsAddedAccounting Standards Update No. 2023-0508/23/2023
Joint VentureAddedAccounting Standards Update No. 2023-0508/23/2023
Legal EntityAddedAccounting Standards Update No. 2023-0508/23/2023
Market ParticipantsAddedAccounting Standards Update No. 2023-0508/23/2023
Noncontrolling InterestAddedAccounting Standards Update No. 2023-0508/23/2023
Nonprofit ActivityAddedAccounting Standards Update No. 2023-0508/23/2023
Not-for-Profit EntityAddedAccounting Standards Update No. 2023-0508/23/2023
Orderly TransactionAddedAccounting Standards Update No. 2023-0508/23/2023
OwnersAddedAccounting Standards Update No. 2023-0508/23/2023
Private CompanyAddedAccounting Standards Update No. 2023-0508/23/2023
Public Business EntityAddedAccounting Standards Update No. 2023-0508/23/2023
Related PartiesAddedAccounting Standards Update No. 2023-0508/23/2023
Security (2nd def.)AddedAccounting Standards Update No. 2023-0508/23/2023
Variable Interest EntitySupersededAccounting Standards Update No. 2025-0305/12/2025
Variable Interest EntityAddedAccounting Standards Update No. 2023-0508/23/2023
805-60-05-1AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-05-2AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-15-1 through 15-4
AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-25-1 through 25-15
AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-30-1 through 30-7
AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-35-1AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-35-2AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-45-1AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-50-1 through 50-3
AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-55-1 through 55-14
AddedAccounting Standards Update No. 2023-0508/23/2023
805-60-65-1AddedAccounting Standards Update No. 2023-0508/23/2023
Source downloaded (UTC): 2026-09-10T01:25:47.997Z to 2026-09-10T01:25:47.997Z Record version: sha256:13f1b1290dd6d7f908209665229c8002cdce2d146aa9a7d9ead76290b8786393 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/805/60/#05-overview-and-background) SEC content: no ##### [805-60-05-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:47.997Z to 2026-09-10T01:25:47.997Z Record version: sha256:ef4e943ae7c234eb852b6eaeaf289715e844510508bae89368addd8cf3eb26ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the accounting and reporting for the formation of 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.") or a [corporate joint venture](https://asc.understandingaccounting.org/glossary/c/#corporate-joint-venture "A corporation owned and operated by a small group of entities (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 corporate 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 corporate 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 corporate joint venture. The ownership of a corporate joint venture seldom changes, and its stock is usually not traded publicly. A noncontrolling interest held by public ownership, however, does not preclude a corporation from being a corporate joint venture.") (collectively, joint ventures) in a joint venture’s separate financial statements. ##### [805-60-05-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:47.997Z to 2026-09-10T01:25:47.997Z Record version: sha256:3fc0178ab11623aeb508e9bc4075f54777a91be937a4aebbad0f7a93aa61bf52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [805-60-25-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-2) requires that a joint venture account for its formation by applying a new basis of accounting. In accounting for the formation of a joint venture, none of the assets and/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.") contributed to the joint venture are viewed as having survived the combination as independent entities. Rather, the formation is viewed as the transfer of the net assets to a new entity that assumes [control](https://asc.understandingaccounting.org/glossary/c/#control "The same as the meaning of controlling financial interest in paragraph 810-10-15-8.") over them. The history of that new reporting entity begins with the joint venture formation. A joint venture establishes a new basis of accounting upon formation by applying aspects of the acquisition method for [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."), with adaptations that are unique to joint ventures as described in this Subtopic. Accounting for a joint venture formation includes the following steps: 1. a Determining 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.") 2. b Recognizing and measuring the [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, the 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.") in the net assets recognized by the joint venture 3. c Recognizing and measuring [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."), if any, using the [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 immediately following formation. Source downloaded (UTC): 2026-09-10T01:25:51.338Z to 2026-09-10T01:25:51.338Z Record version: sha256:fd570149c321a5a133a93fd3883b10780dc5291b98c0550aa7c4fe0fadbefae0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/805/60/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [805-60-15-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:51.338Z to 2026-09-10T01:25:51.338Z Record version: sha256:7711055e141e2d3d5779e0024e5362d88d27bf2071024ed5c50a8d3d556e7a56 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. #### Entities ##### [805-60-15-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:51.338Z to 2026-09-10T01:25:51.338Z Record version: sha256:1044350603d69e717a4f9fdad07d938730cd8a08907d19841a21550d6864cba9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to the financial statements of [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.") and [corporate joint venture](https://asc.understandingaccounting.org/glossary/c/#corporate-joint-venture "A corporation owned and operated by a small group of entities (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 corporate 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 corporate 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 corporate joint venture. The ownership of a corporate joint venture seldom changes, and its stock is usually not traded publicly. A noncontrolling interest held by public ownership, however, does not preclude a corporation from being a corporate joint venture.") entities (collectively, joint ventures) as defined in Section 805-60-20. #### Transactions ##### [805-60-15-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:51.338Z to 2026-09-10T01:25:51.338Z Record version: sha256:cc9046711efdb0550f43d10b9994e55762333ada9d9145d63a9b0de30a32d843 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to the formation of joint ventures. ##### [805-60-15-4](https://asc.understandingaccounting.org/asc/805/60/#805-60-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:51.338Z to 2026-09-10T01:25:51.338Z Record version: sha256:032e999ddde2684713796a3eabe6046df9a2dcd00ee58347b1e3abf6690bbd95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to any of the following: 1. a Transactions between a joint venture and its [owners](https://asc.understandingaccounting.org/glossary/o/#owners "Used broadly to include holders of ownership interests (equity interests) of investor-owned entities, mutual entities, or not-for-profit entities. Owners include shareholders, partners, proprietors, or members or participants of mutual entities. Owners also include owner and member interests in the net assets of not-for-profit entities.") other than the formation of a joint venture 2. b Formations of entities determined to be [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.") in accordance with Topic 958 3. c Combinations between entities, businesses, or [nonprofit activities](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.") under common control (see paragraph [805-50-15-6](https://asc.understandingaccounting.org/asc/805/50/#805-50-15-6) for examples) 4. d Entities in the construction or extractive industries that may be proportionately consolidated by any of their investor-venturers in accordance with paragraph [810-10-45-14](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-14) 5. e Collaborative arrangements within the scope of Topic 808, except for any part of the arrangement that is conducted in a separate legal entity that meets the definition of a joint venture. Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:3fdb79e2de79e4b44297a7452054fc9d156595d1b67a6e4e6c0970e1d0a2f464 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/805/60/#25-recognition) SEC content: no ##### [805-60-25-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:f34a6a162e109fecf37bb03b39e6b3417f69c0a06c87d974f9b9cbcaa9200219 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall determine whether a transaction or an event is 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.") formation by applying the definition of joint venture (or [corporate joint venture](https://asc.understandingaccounting.org/glossary/c/#corporate-joint-venture "A corporation owned and operated by a small group of entities (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 corporate 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 corporate 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 corporate joint venture. The ownership of a corporate joint venture seldom changes, and its stock is usually not traded publicly. A noncontrolling interest held by public ownership, however, does not preclude a corporation from being a corporate joint venture.")) and the guidance in paragraph [805-60-25-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-3) on its [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."). If the transaction or event is not a joint venture formation, the reporting entity shall account for the transaction or event in accordance with other generally accepted accounting principles (GAAP). ##### [805-60-25-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:4d98ebefa20655079bc74119b439038ecf5a233f663006374c60538debb8c065 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting for joint venture formations as described in this Subtopic requires that a joint venture establish upon formation a new basis of accounting for its assets and liabilities in accordance with Subtopic 805-20 on [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."). A joint venture shall recognize [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."), if any, in accordance with paragraph [805-60-25-13](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-13). Unlike the acquisition method, accounting for the formation of a joint venture does not include the identification of an [acquirer](https://asc.understandingaccounting.org/glossary/a/#acquirer "The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer."). This Section includes the following requirements: 1. a Determining the formation date 2. b Determining whether multiple arrangements should be accounted for as a single formation transaction 3. c Determining what is part of the joint venture formation 4. d Accounting for the formation of a joint venture, as applicable: 1. 1 New basis of accounting 2. 2 Private company accounting alternatives 3. 3 Goodwill 4. 4 Measurement period 5. 5 Transfers of [financial assets](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity."). #### Determining the Formation Date ##### [805-60-25-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:b944506ff2b474b879534d83cf8ebff55b694e735f1c87642c6ce7453531be82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The joint venture formation date is the date on which an entity initially meets the definition of a joint venture, which is not necessarily the [legal entity](https://asc.understandingaccounting.org/glossary/l/#legal-entity "Any legal structure used to conduct activities or to hold assets. Some examples of such structures are corporations, partnerships, limited liability companies, grantor trusts, and other trusts.") formation date. A joint venture’s formation date is the measurement date for the formation transaction. A joint venture shall determine a single formation date and account for its formation as of that date. A joint venture shall consider the pertinent facts and circumstances in identifying its formation date. All contributions received, or that are receivable, as of the formation date, including consideration of the guidance in paragraphs [805-60-25-4 through 25-5](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-4) on multiple arrangements that should be accounted for as a single formation transaction, constitute the joint venture formation transaction. #### Determining Whether Multiple Arrangements Should Be Accounted for as a Single Formation Transaction ##### [805-60-25-4](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:804d7821c5711ad901eeff7119d473eea33f7b1559c88f444b1087c9cbc72443 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Multiple arrangements may establish the formation of a joint venture and constitute the joint venture formation transaction. Circumstances sometimes indicate that the multiple arrangements should be accounted for as a single transaction. In determining whether to account for the multiple arrangements as a single transaction that establishes the formation, a joint venture shall consider the terms and conditions of the arrangements and their economic effects. Any of the following may indicate that the joint venture should account for the multiple arrangements as a single transaction that established the formation of the joint venture: 1. a The multiple arrangements are entered into at the same time or in contemplation of one another. 2. b The multiple arrangements form a single transaction designed to achieve an overall commercial effect. 3. c The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement. 4. d One arrangement considered on its own is not economically justified, but the multiple arrangements are economically justified when considered together. ##### [805-60-25-5](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:876eec14f3bdab10c9ef63a9a344676089f40cefe2679b33c9b1bc143b1dfc0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If multiple arrangements are accounted for as a single transaction in accordance with paragraph [805-60-25-4](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-4), then the formation date shall be the measurement date for all arrangements that form part of the single formation transaction. A joint venture shall recognize identifiable assets and liabilities that are part of that single transaction when they satisfy the recognition criteria described in paragraph [805-60-25-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-2). #### Determining What Is Part of the Joint Venture Formation ##### [805-60-25-6](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:49813d444b67455848b2f345b595e47178531bb357e2ade70ae810b60c0e1c87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture and its [owners](https://asc.understandingaccounting.org/glossary/o/#owners "Used broadly to include holders of ownership interests (equity interests) of investor-owned entities, mutual entities, or not-for-profit entities. Owners include shareholders, partners, proprietors, or members or participants of mutual entities. Owners also include owner and member interests in the net assets of not-for-profit entities.") (the venturers) may enter into an arrangement upon formation that is separate from the formation of the joint venture. For example, a joint venture may enter into an arrangement with a venturer to compensate the venturer or others (such as employees of the venturers) for future services. A joint venture shall apply the guidance in paragraphs [805-10-55-24 through 55-26](https://asc.understandingaccounting.org/asc/805/10/#805-10-55-24) when determining whether a transaction involving payments to be made by the joint venture to the venturers or others is separate from or part of a joint venture formation. A joint venture shall identify any amounts that are separate from the formation of the joint venture and shall recognize the identifiable assets and liabilities that are determined to be part of the joint venture formation. Separate transactions shall be accounted for in accordance with other relevant GAAP. ##### [805-60-25-7](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:7673115dd410c89c61b04a5ad1bd5580518915e3465ba312b07d197d1a0808b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture shall not apply by analogy the guidance in paragraphs [805-10-55-20 through 55-23](https://asc.understandingaccounting.org/asc/805/10/#805-10-55-20) (for a transaction that in effect settles preexisting relationships between the acquirer and the acquiree) or paragraph [805-10-25-23](https://asc.understandingaccounting.org/asc/805/10/#805-10-25-23) (for acquisition-related costs and transactions that reimburse the acquiree or its former owners for paying the acquirer’s acquisition-related costs). ##### [805-60-25-8](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:1cd682d5c684539ccbf559c010516f23887568e98e055403f75b571365200b8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, upon formation, a joint venture issues share-based payment awards to replace awards held by grantees of the contributed entities, then the joint venture shall apply the guidance in paragraphs [805-30-30-9 through 30-13](https://asc.understandingaccounting.org/asc/805/30/#805-30-30-9) to allocate the fair-value-based measure of replacement share-based payment awards between preformation vesting and postformation compensation cost. Paragraphs [805-60-55-2 through 55-14](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-2) provide illustrations of the accounting for the issuance of replacement share-based payment awards in a joint venture formation. ##### [805-60-25-9](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:7561a1a3ba815ef3418172631241b1f6b53226d6cc71ba965d70e95112afc826 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the purposes of applying the business combinations guidance on arrangements that include contingent payments to employees or selling shareholders and replacement share-based payment awards referenced in paragraphs [805-60-25-6 through 25-8](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-6): 1. a The joint venture shall be viewed as analogous to the acquirer in a business combination. 2. b The venturers shall be viewed as analogous to the selling shareholders. 3. c The recognized businesses and/or assets shall be viewed as analogous to an acquiree. #### Accounting for the Formation of a Joint Venture ##### [805-60-25-10](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:90063c866591f0e3f369e02082e1e4e73868a074de0e9293e192fedfedd3acdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the formation date, a joint venture shall account for its formation by establishing a new basis of accounting for its identifiable assets and liabilities, and any noncontrolling interest, in accordance with Subtopic 805-20. ##### [805-60-25-11](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:bf8caa3e63fe97f76917a672d8aa4155ddbc6d495f64f86aa8c99014c486e427 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture shall account for its formation in accordance with this Subtopic regardless of whether the assets or group of assets recognized by the joint venture 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.") in accordance with Subtopic 805-10. ##### [805-60-25-12](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:c710f38da915e94761b4d64a6a11519e2c8ce92e319dc71243f5796ee6716d6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture that is a [private company](https://asc.understandingaccounting.org/glossary/p/#private-company "An entity other than a public business entity, a not-for-profit entity, or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting.") may elect to apply the accounting alternative for the recognition of identifiable intangible assets described in paragraphs [805-20-25-30 through 25-33](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-30). In accordance with paragraph [805-20-15-4](https://asc.understandingaccounting.org/asc/805/20/#805-20-15-4), a joint venture that elects to apply this accounting alternative must adopt the accounting alternative for amortizing goodwill in the Accounting Alternatives Subsections of Subtopic 350-20. ##### [805-60-25-13](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:26201f9b669b53056d642be8a76fef8814668c7ef10075266e251e344c70202f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accounting for its formation, a joint venture shall recognize goodwill as of the formation date, when applicable. The presence of more than an insignificant amount of goodwill is expected to be unusual if, at formation, the assets or group of assets recognized by the joint venture do not constitute a business in accordance with Subtopic 805-10. Paragraph [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2) describes how a joint venture should measure goodwill upon its formation. ##### [805-60-25-14](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:c3a31cef702501f4c24badea17c84fe8cb5f4051e671bdd9f6651817ba5c236e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the initial accounting for a joint venture formation is incomplete by the end of the reporting period in which the formation date occurs, the joint venture may apply the measurement period guidance in paragraphs [805-10-25-13 through 25-19](https://asc.understandingaccounting.org/asc/805/10/#805-10-25-13) for the items for which the accounting is incomplete. Joint ventures that apply the measurement period guidance shall disclose the information described in paragraph [805-60-50-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-50-3). ##### [805-60-25-15](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:25:57.804Z to 2026-09-10T01:25:57.804Z Record version: sha256:bfd37ec3837c0c054aab4c4fd64cdfcb817d9af2651ed431c56c0ab44d1bd8a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a venturer transfers financial assets that are within the scope of Subtopic 860-10 to the joint venture upon formation, then the joint venture shall determine whether the transfer results in the recognition of the transferred financial assets by the joint venture by applying the guidance in Subtopic 860-10. 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)). Source downloaded (UTC): 2026-09-10T01:26:03.723Z to 2026-09-10T01:26:03.723Z Record version: sha256:e442a9c339fc1d8b673d134f5c58d6a18b4a59de87b9c14442400649cf94e928 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/805/60/#35-subsequent-measurement) SEC content: no ##### [805-60-35-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:03.723Z to 2026-09-10T01:26:03.723Z Record version: sha256:5f23ef3f65d295dfc9bf29136c26dccb05e18e1037a2da3e7d3d7c4557050fbd 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 subsequently measure and account for the assets and liabilities recognized upon formation in accordance with the requirements for [acquirers](https://asc.understandingaccounting.org/glossary/a/#acquirer "The entity that obtains control of the acquiree. However, in a business combination in which a variable interest entity (VIE) is acquired, the primary beneficiary of that entity always is the acquirer. (P) December 16, 2026; (N) December 16, 2026805-10-65-5The entity that obtains control of the acquiree.See paragraphs 805-10-25-4805-10-25-5 for guidance on determining the acquirer.") of 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.") in Sections 805-10-35, 805-20-35, and 805-30-35, and other generally accepted accounting principles (GAAP), as applicable. ##### [805-60-35-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:03.723Z to 2026-09-10T01:26:03.723Z Record version: sha256:20f482dcbf6acf43a54560a2b3e56e6d26515873f7d4611af331140a0475933e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A joint venture that is a [private company](https://asc.understandingaccounting.org/glossary/p/#private-company "An entity other than a public business entity, a not-for-profit entity, or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting.") may elect to apply the accounting alternatives for the subsequent measurement of [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.") described in paragraphs [350-20-35-62 through 35-82](https://asc.understandingaccounting.org/asc/350/20/#350-20-35-62). Source downloaded (UTC): 2026-09-10T01:26:07.446Z to 2026-09-10T01:26:07.446Z Record version: sha256:5cdc8a9644e87c2fd56dae0be9c7555e6637eb8738aa5a2e7176149693ad590e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/805/60/#45-other-presentation-matters) SEC content: no #### Disclosure of Formation Date Balance Sheet ##### [805-60-45-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:07.446Z to 2026-09-10T01:26:07.446Z Record version: sha256:d92f680a842d639b86ffbd4472f7b9e2fa5e942797b28f8ddece17e79183af15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To satisfy the requirements in paragraph [805-60-50-2(e)](https://asc.understandingaccounting.org/asc/805/60/#805-60-50-2), 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.") may, in lieu of disclosure in the notes to financial statements, present a statement of financial position as of 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.") that reflects the amounts recognized by the joint venture for each major class of assets and liabilities as a result of its formation. Source downloaded (UTC): 2026-09-10T01:26:09.999Z to 2026-09-10T01:26:09.999Z Record version: sha256:2c8194be2f1ad79172fe7483462a605a011fb25a69a8f23b8ec6eb57e8db5516 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/805/60/#50-disclosure) SEC content: no ##### [805-60-50-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:09.999Z to 2026-09-10T01:26:09.999Z Record version: sha256:9e682beff782fcd52c8c56031a2a1175ce6b168faef125d22faf7d4fb30cb507 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 disclose information that enables users of its financial statements to understand the nature and financial effect of the joint venture formation in the period in which 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.") occurs. ##### [805-60-50-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:09.999Z to 2026-09-10T01:26:09.999Z Record version: sha256:88b09ac5a8d0654624a39e6ad622d3999a6a952d4bd08097f44d1c7ccb8e207c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the period of formation, a joint venture shall disclose the following: 1. a The formation date 2. b A description of the purpose for which the joint venture was formed (for example, 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) 3. c 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 4. d A description of the assets and liabilities recognized by the joint venture at the formation date 5. e The amounts recognized by the joint venture for each major class of assets and liabilities as a result of accounting for its formation, either presented on the face of financial statements or disclosed in the notes to financial statements (see paragraph [805-60-45-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-45-1)) 6. f A qualitative description of the factors that make up any [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.") recognized, such as expected synergies from combining operations of the contributed assets 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."), [intangible assets](https://asc.understandingaccounting.org/glossary/i/#intangible-assets "Assets (not including financial assets) that lack physical substance. (The term intangible assets is used to refer to intangible assets other than goodwill.)") that do not qualify for separate recognition, or other factors. ##### [805-60-50-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:09.999Z to 2026-09-10T01:26:09.999Z Record version: sha256:5536bcebbdff1d7922b785c8dc2d96ef248eb55c8d185665a5d0c7e48af88a6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the initial accounting for a joint venture formation is incomplete (see paragraph [805-60-25-14](https://asc.understandingaccounting.org/asc/805/60/#805-60-25-14)) for particular assets, liabilities, noncontrolling interests, or the formation-date fair value of the joint venture as a whole and the amounts recognized in the financial statements for the joint venture formation thus have been determined only provisionally, the joint venture shall disclose the following information: 1. a The reasons why the initial accounting is incomplete 2. b The assets, liabilities, noncontrolling interests, or the formation-date fair value of the joint venture as a whole for which the initial accounting is incomplete 3. c The nature and amount of any measurement period adjustments recognized during the reporting period, including separately the amount of adjustment to current-period income statement line items relating to the income effects that would have been recognized in previous periods if the adjustment to provisional amounts was recognized as of the formation date. Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:0b6f6f4e70059897d5e132e3e6706ea3294312adeb353b162a8bc34f8e702fb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/805/60/#55-implementation-guidance-and-illustrations) SEC content: no ##### [805-60-55-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:2d7311851663d3c7994c6adcc32a12aa8a1b313cbe7444f12c0fc53cfbe367e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section is an integral part of the requirements of this Subtopic. This Section provides illustrations that address the general application of accounting requirements for [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.") formations. #### Illustrations ##### [805-60-55-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:f05106ec277e93526855858662f20ab7ebb7b2bd254b573fc0d86ec81f4b1735 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 1, 20X0, a newly formed corporation with no assets or liabilities, New Venture, receives contributions of a controlling financial interest in Business A (90 percent voting interest) from Venturer 1 and Business B (100 percent voting interest) from Venturer 2 and, in exchange, issues 50 common shares to each Venturer 1 and Venturer 2. Assume that New Venture has no other classes of equity or any other equity instruments outstanding before receiving the contributions. It is determined that New Venture first met the definition of a joint venture on January 1, 20X0. New Venture determines January 1, 20X0, to be its [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."). ##### [805-60-55-3](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:93c98d7c088b97e693348a41ffb79a04172566931873207bf2d9b5968752860b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accordance with paragraph [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2), but before consideration of any liabilities for share-based payments, New Venture determines that the [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 is $100 million including a [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.") (10 percent voting interest) in Business A that is owned by an outside entity. It also determines, in accordance with paragraph [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2), that the formation-date fair value of the identifiable assets is $120 million, the fair value of the liabilities is $40 million, and the fair value of the noncontrolling interest in Business A is $5 million. ##### [805-60-55-4](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:8677e214f797b24e101f45706ae3422b1ad5e16d18f6233927f8b6548dcad465 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Upon formation, New Venture exchanges replacement awards that require one year of postformation vesting for share-based payment awards of Business A for which employees had not yet rendered all of the required services as of the formation date. The fair-value-based measure of both awards (the original awards and the replacement awards) is $20 million at the formation date. When originally granted, the awards of the contributed business had a requisite service period of four years. As of the formation date, the contributed business’s employees had rendered two years’ service, and they would have been required to render two additional years of service after the formation date for their awards to vest. Accordingly, only a portion of the contributed business’s awards is attributable to preformation vesting. ##### [805-60-55-5](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:5745e6f9cc900a6dd5f91615c3d22d6c72507259e035884cfd10fe15e06b0544 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The replacement awards require only one year of postformation vesting. Because employees have already rendered two years of service, the total requisite service period is three years. For simplicity, assume that New Venture estimates that there will be no forfeitures of the replacement share-based payment awards. The portion attributable to preformation vesting equals the fair-value-based measure of the contributed business’s award ($20 million) multiplied by the ratio of the preformation vesting period (2 years) to the greater of the total service period (3 years) and the original service period of the contributed business’s award (4 years). Thus, $10 million ($20 million × 2 ÷ 4 years) is attributable to preformation vesting and, therefore, New Venture’s additional paid-in capital upon formation. The remaining $10 million is attributable to postformation vesting and therefore recognized as compensation cost in New Venture’s postformation financial statements in accordance with Topic 718 on stock compensation. ##### [805-60-55-6](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:a8ebeb29b79b38e93b5fce9345a0abeda0ea3be3f4b08384afa1f41bef471e30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture applies the guidance in Topic 718 to determine whether the share-based payments should be classified as liabilities or equity. ##### [805-60-55-7](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:bb86eb3bb191b272c300ee74691cbf0ba62a5d116cbb532deced60f372710448 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If New Venture determines that the replacement share-based payment awards are classified as liabilities, then total liabilities will equal $50 million ($40 million + $10 million). For simplicity, when taking the share-based payment liabilities into account, the fair value of New Venture as a whole is $90 million ($100 million – $10 million). ##### [805-60-55-8](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:17831ea7ddb09cb7d55d8a794fe64d9de3e7f3211e1357168f2879d6b4150af3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture calculates goodwill as follows (in millions), consistent with the guidance in paragraph [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2). The formation-date fair value of the joint venture as a whole is equal to 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). - ![](https://asc.understandingaccounting.org/asc-img/GUID-DB4C79A8-947F-4078-A24A-9A09A9244147-low.gif) Fair value of New Venture as a whole (including $5 noncontrolling interest) $90 Less: Net fair value of identifiable assets and liabilities recognized ($120 assets − $50 liabilities) (70) Goodwill recognized by New Venture at formation date $20 ##### [805-60-55-9](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:11fbcfaeac4bff7c58c5f6c5e7c24f956ebf7d77c3c32d15a1ac87d37baa9e11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture calculates additional paid-in capital as follows (in millions). - ![](https://asc.understandingaccounting.org/asc-img/GUID-49B0BB60-78D5-42DC-A472-29022B07E246-low.gif) "Net assets recognized by New Venture, excluding share-based payment liabilities ($120 identifiable assets – $40 liabilities + $20 goodwill)" $100 Less: The fair value of noncontrolling interest in business contributed to New Venture (5) Less: The fair value of preformation vesting replacement share-based payments classified as a liability (10) Additional paid-in capital recognized by New Venture at the formation date $85 ##### [805-60-55-10](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:3ec549d1887f533f95339126d34cd666c558cb59a477d75c19db98c810044695 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture records the following entry at the formation date (in millions). - ![](https://asc.understandingaccounting.org/asc-img/GUID-209D267C-DA1F-4444-97DE-EB2538AE6637-low.gif) Identifiable assets recognized $120 Goodwill 20 Liabilities recognized $40 Noncontrolling interest 5 Share-based payment liability (preformation vesting) 10 Additional paid-in capital 85 ##### [805-60-55-11](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:3982dbe66bb545a4a8821a948656574ab8b4013657ea821b785dbce3f236ec31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If New Venture determines that the replacement share-based payment awards are classified as equity, then total liabilities will equal $40 million and the fair value of New Venture as a whole is $100 million. ##### [805-60-55-12](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:4e2d771837ba020c5d9297864762447c45116c5f58f86b3faf6ac7f5e8f6c71a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture calculates goodwill as follows (in millions), consistent with the guidance in paragraph [805-60-30-2](https://asc.understandingaccounting.org/asc/805/60/#805-60-30-2). The formation-date fair value of the joint venture as a whole is equal to 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). - ![](https://asc.understandingaccounting.org/asc-img/GUID-7DA11843-71E1-49E5-A74F-55EEB145DFA8-low.gif) Fair value of New Venture as a whole (including $5 noncontrolling interest) $100 Less: Net fair value of identifiable assets and liabilities recognized ($120 assets − $40 liabilities) (80) Goodwill recognized by New Venture at formation date $20 ##### [805-60-55-13](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:d0b0a1905313c450557cf358dd9b0b36890380c60c0b272ef18535e447ea16f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture calculates additional paid-in capital, excluding additional paid-in capital attributable to share-based payments, as follows (in millions). - ![](https://asc.understandingaccounting.org/asc-img/GUID-25C813EF-9ADF-4804-AB97-817F5B708C3C-low.gif) "Net assets recognized by New Venture, excluding share-based payment liabilities ($120 identifiable assets – $40 liabilities + $20 goodwill)" $100 Less: The fair value of noncontrolling interest in business contributed to New Venture (5) Less: The fair value of preformation vesting replacement share-based payments classified as equity (10) Additional paid-in capital recognized by New Venture at the formation date (excluding additional paid-in capital attributable to preformation vesting share-based payments) $85 ##### [805-60-55-14](https://asc.understandingaccounting.org/asc/805/60/#805-60-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:12.163Z to 2026-09-10T01:26:12.163Z Record version: sha256:db1338b1548858a4763818e2f1cffcbe13b344583eb8c1eaad9f7c62f21cae86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. New Venture records the following entry at the formation date (in millions). - ![](https://asc.understandingaccounting.org/asc-img/GUID-2BC25624-18F1-4DAC-83DF-CEC68C0CCBF0-low.gif) Identifiable assets recognized $120 Goodwill 20 Liabilities recognized $40 Noncontrolling interest 5 Additional paid-in capital—share-based payments (preformation vesting) 10 Additional paid-in capital 85 Source downloaded (UTC): 2026-09-10T01:26:14.808Z to 2026-09-10T01:26:14.808Z Record version: sha256:c34172f946f8086ac41318a64786d9e563369bf7bc8e4ec3df7633311eff0873 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-60-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/805/60/#65-transition-and-open-effective-date-information) SEC content: no ##### [805-60-65-1](https://asc.understandingaccounting.org/asc/805/60/#805-60-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:14.808Z to 2026-09-10T01:26:14.808Z Record version: sha256:a86abcbff01bb5a52c0136511e93ffe822ea06f802832ddd8aee4b23774c682b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/02/2026 after the end of the transition period stated in Accounting Standards Update No. 2023-05, _Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement_.