Trial Free Trial APLN WEBT097A 68037 0 Financial Accounting Resource Center The Financial Accounting Resource...
By Denise Lugo
May 21 — The Financial Accounting Standards Board proposed amendments that it intends would simplify the accounting for adjustments made to provisional amounts recognized in a business combination.
Adjustments to provisional amounts that are identified during the measurement period should be recognized in the reporting period in which the adjustment amount is determined, FASB proposed May 21.
In the same period's financial statements, the acquirer should also record the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, the board proposed.
The effect on earnings should be calculated as if the accounting had been completed at the acquisition date.
Companies will be required to apply the amendments prospectively to adjustments to provisional amounts that are identified after the effective date of the proposed amendments and that are within the measurement period, said FASB.
Transition disclosures would also be required.
Companies have said that the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination adds cost and complexity to financial reporting, but doesn't significantly improve the usefulness of the information provided to users.
The proposed update was issued as part of the simplification initiative, which aims to identify, evaluate and improve areas of generally accepted accounting principles for which cost and complexity can be reduced.
FASB said it is seeking comments by July 6 on the proposal, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments.
To contact the reporter on this story: Denise Lugo in Norwalk, Conn., at firstname.lastname@example.org
To contact the editor responsible for this story: Steven Marcy at email@example.com
For a copy of the proposal, including how to submit comments go to http://www.fasb.org/cs/ContentServer?c=Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176166046432&mc_cid=7e32f9abad&mc_eid=2f8c77068c
For a general discussion of business combinations, see 5170-2nd, Business Combinations, at 5170.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)