The FASB’s “simplification” proposals are coming fast, and some of them are making me furious. Proposed ASU No. 2015-260, which would roll back important anti-abuse provisions in ASC Topic 805—Business Combinations, is a very nice place to start.
A Perfectly Good GAAP
GAAP has long permitted companies to revise “provisional” measures of assets acquired and liabilities assumed (AA&LA) in a business acquisition. It’s more than a little bit hard for me to sympathize with a company that doesn’t have a really good idea of the actual value of the assets it acquired and the liabilities it has assumed, but that’s beside the point. The reality is that accounting rules have long accommodated management’s desire to have a “measurement period” in M&A accounting during which it may collect and process additional information about conditions that existed at the balance sheet date pertaining to particular assets and liabilities.
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