Business Combination Example under ASC 805

ASC 805 requires a business combination to be accounted for under the acquisition method, which can be separated into the following four steps:

1. Identify the acquirer
2. Determine the acquisition date
3. Recognize and measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in the acquiree
4. Recognize and measure goodwill (or a gain from a bargain purchase)

Goodwill is recognized as the excess of the acquisition date fair value of the purchase price over the acquisition date fair value of assets acquired and liabilities assumed (subject to certain exceptions).

Put your knowledge to the test in this downloadable business combination example, where you will be provided with a set of case facts to calculate the amount of goodwill required to be recognized by the acquirer.

Content includes:

• A comprehensive set of case facts
• A step-by-step case solution which includes a description of the accounting treatment for each of the assumed assets and liabilities as of the acquisition date
• Calculation of goodwill

Download this detailed case example to try and calculate the amount of goodwill resulting from a business combination under ASC 805.