FASB ASC 805 Business Combinations requires the recognition and fair value measurement of all identifiable assets, liabilities and goodwill from a business combination. FASB ASC 805 introduces a number of significant changes to accounting for business combinations including the following:
- More transactions and other events must be accounted for as business combinations requiring valuations
- Transition from company assumptions to “market participant” assumptions changes key valuation inputs (e.g. acquired trade names may require valuation even if not used by acquirer)
- Contingent liabilities and contingent consideration will require advanced valuation modeling
- Valuation work will need to be started during the pre-transaction phase to avoid retrospective financial statement adjustments
Murray Devine has extensive experience in performing business combination asset allocations for financial reporting with the special expertise and skills necessary to address the challenges of implementing FASB ASC 805 Business Combinations.