Handbook: Asset acquisitions

Our in-depth guide explains in detail how to account for asset acquisitions. The guidance includes Q&As and examples clarifying how the accounting for asset acquisitions differs from business combinations accounting.

Applicability

• An acquirer entering into a transaction considered to be an asset acquisition

Relevant dates

• Effective immediately

Key impacts

• Accounting for asset acquisitions follows a cost accumulation model, rather than the fair value model that applies to business combinations.
• As entities adopt the new definition of a business, we expect more transactions to qualify as asset acquisitions. 
• ASC 805-50 provides only limited guidance, so entities need to consider other sources, such as:
  • ASC 805 on business combinations
  • Other existing US GAAP
  • Superseded US GAAP on business combinations that was consistent with a cost accumulation model. 

Report contents

• Executive summary
• Scope of ASC 805-50
• Determining the cost of the acquisition
• Allocating the cost of an asset acquisition
• SEC reporting considerations