merger of not-for-profit entities

Broad Transactions2

1. 805-954Health Care Entities805 Business Combinations

   ASC 805-954 supplements Subtopic 958-805 for not-for-profit, business-oriented health care entities that combine with other NFPs, businesses, or nonprofit activities in a transaction meeting the definition of a merger of not-for-profit entities or an acquisition by a not-for-profit entity. Its incremental rules address classification of acquired debt securities, and—most importantly—whether particular acquisition-related amounts (contingent consideration remeasurements, the separate charge, inherent contributions, step-acquisition gains or losses) are reported within or outside the performance indicator. It also prescribes pro forma performance indicator disclosures for public health care entities.

2. 805-958Not-for-Profit Entities805 Business Combinations

   ASC 958-805 (indexed here as 805-958) governs combinations in which a not-for-profit entity is the reporting entity and combines with other NFPs, businesses, or nonprofit activities. If the participating governing boards cede control to a new NFP, the transaction is a merger accounted for under the carryover method (combine GAAP carrying amounts, no fresh start, no new assets); if one entity obtains control of the other, it is an acquisition accounted for under the acquisition method with NFP-specific rules for identifying the acquirer, goodwill, and inherent contributions.