Peeling away financial reporting issues one layer at a time

Business Combinations and Consolidation


Overview and background to consolidated financial statements

  • A thumbnail history leading to current GAAP
  • The major differences between the old “purchase” and the new “acquisition” methods

ASC Topic 810 — The comprehensive consolidation model, including VIEs

Scope of ASC Topic 805

  • Definition of a “business”
  • Definition of “control”
  • Identifying a business combination

The Acquisition Method

  • Identifying the acquirer (including reverse acquisitions)
  • Determining the acquisition date
  • Recognizing and measuring identifiable assets acquired and liabilities assumed
  • Exceptions to the fair value recognition and fair value measurement principles
  • Goodwill, impairment and bargain purchases

Special considerations in applying the acquisition method

  • Variable interest entities
  • Business combinations achieved in stages
  • Push-down accounting

ASC Topic 810 — Noncontrolling interests

Pro forma financial statements and SEC reporting