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.
An acquirer entering into a transaction considered to be an asset acquisition
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Superseded US GAAP on business combinations that was consistent with a cost accumulation model.