Accounting for Business Combinations, Goodwill, and Other Intangible Assets (2010)

Section I: Interpretations of Topic 850, Business Combinations

• Business Combinations—Overall (805-10)
• Paragraphs 805-10-05-01 Through 05-6: Overview And Background—General
• Paragraph 805-10-10-1: Objectives—General
• Paragraphs 805-10-15-1 Through 15-4: Scope And Scope Exceptions—General
• Combinations Of Entities Under Common Control
• Not-For-Profit Entities
• Acquisitions Using A “Newco”

Section 805-10-20: Glossary

• Paragraphs 805-10-25-1 Through 25-3: Recognition—General
• Accounting For Asset Acquisitions: General Concepts
• Applicability To Development Stage Entities
• Paragraphs 805-10-25-4 And 25-5: Recognition—General
• Identifying The Acquiring Entity
• Determining The Acquirer: Control Over The Governing Body
• Determining The Acquirer In A Business Combination Of More Than Two Entities
• Variable Interest Entities
• Paragraphs 805-10-25-6 And 25-7: Recognition—General
• Acquisition Date
• Paragraphs 805-10-25-8 Through 25-12: Recognition—General
• A Business Combination Achieved In Stages
• Paragraphs 805-10-25-13 Through 25-19: Recognition—General
• The Measurement Period
• Measurement Period Adjustments
• Paragraphs 805-10-25-20 Through 25-22: Recognition—General
• Transactions Apart From The Business Combination
• Bonus Payments To Seller/Owners And Seller/Managers
• Employee Compensation Arrangements
• Paragraph 805-10-25-23: Recognition—General
• Acquisition-Related Costs
• Accounting For Acquisition-Related Costs Incurred Before The Effective Date Of Fasb Statement No. 141R, Business Combinations, As Codified In Topic 805
• Paragraphs 805-10-30-1 Through 30-3: Initial Measurement—General
• Paragraphs 805-10-35-1 And 35-2: Subsequent Measurement—General
• Paragraphs 805-10-50-1 Through 50-4: Disclosure—General
• Mid-Year Business Combinations-Consolidation Of Subsidiary Revenues And Expenses
• Preparation Of The Statement Of Cash Flows In The Year Of Acquisition
• Presentation Of Supplemental Pro Forma Information
• Interim Pro Forma Disclosure For Sec Registrants
• Paragraphs 805-10-50-5 Through 50-8: Disclosure—General
• Paragraphs 805-10-55-1 Through 55-3: Implementation Guidance And Illustrations—General
• Application Of Topic 805 To Physician Practice Management Entities And Other Consolidation-By-Contract Arrangements
• Arrangements To Operate Entities As A Single Entity Without A Purchase Or Exchange Of Shares
• Joint Ventures, Combinations Of Entities Under Common Control, And Mutual Entities
• Majority Owner's Accounting For A Transaction In The Shares Of A Consolidated Subsidiary And A Derivative Instrument Indexed To The Noncontrolling Interest In That Subsidiary
• Accounting For An Instrument (Or An Embedded Feature) With A Settlement Amount That Is Based On The Stock Of An Entity's Consolidated Subsidiary
• Early Extinguishment Of A Subsidiary's Mandatorily Redeemable Preferred Stock
• Business Combination Achieved Through Acquiree Share Repurchase
• Paragraphs 805-10-55-4 Through 55-9: Implementation Guidance And Illustrations—General
• Definition Of A Business
• Acquisition Of An Entity Owning Only A Portfolio Of Loans Or Leases
• Distinguishing Between A Business Combination And An Asset Acquisition
• Paragraphs 805-10-55-10 Through 55-49: Implementation Guidance And Illustrations—General
• Paragraph 805-10-65-1: Transition And Open Effective Date Information—General Business Combinations—Identifiable Assets And Liabilities, And Any Noncontrolling Interest (805-20)
• Paragraphs 805-20-05-1 And 05-2: Overview And Background—General
• Paragraph 805-20-15-1: Scope And Scope Exceptions—General

Section 805-20-20: Glossary

• Paragraphs 805-20-25-1 Through 25-5: Recognition—General
• Accounting For Restructuring And Exit Costs
• Paragraphs 805-20-25-6 Through 25-8: Recognition—General
• Effect Of Acquisition On Securities Held By Acquiree
• Items Hedged By Acquiree
• Exceptions To Paragraph 805-20-25-6
• Paragraphs 805-20-25-9 And 25-10: Recognition—General
• Recognition Of Intangible Assets Separately From Goodwill
• The Contractual-Legal Criterion
• The Separability Criterion
• Paragraphs 805-20-25-11 Through 25-13: Recognition—General
• Recognizing Particular Assets Acquired And Liabilities Assumed: Operating Leases
• Acquisition Of Operating Leases With Nonlevel Rents
• Paragraphs 805-20-25-14 Through 25-15A: Recognition—General
• Reacquired Rights
• Paragraphs 805-20-25-16 Through 25-28: Recognition—General
• Initial Recognition For Contingencies
• Indemnification Assets
• Paragraphs 805-20-30-1 Through 30-6: Initial Measurement—General
• Fair Value Measurements For Assets Acquired And Liabilities Assumed
• Deferred Revenue In A Business Combination
• Fair Value Guidance For Specific Assets And Noncontrolling Interest
• First Post-Acquisition Income Statement May Not Be Reflective Of Normal Earnings: A Case Report
• LIFO Basis For Books And FIFO For Tax
• LIFO Inventories And The IRS Conformity Rules
• Reporting Plant Asset Accumulated Depreciation
• Mineral Rights
• Useful Lives Of Leasehold Improvements
• Assets To Be Sold
• Paragraphs 805-20-30-7 And 30-8: Initial Measurement—General
• The Acquisition Method And Noncontrolling Interest (Formerly Minority Interest)
• Presentation Of Noncontrolling Interest In The Consolidated Financial Statements
• Paragraphs 805-20-30-9 Through 30-12: Initial Measurement—General
• Exceptions To The Measurement Principle
• Paragraph 805-20-30-13: Initial Measurement—General
• Income Taxes And Business Combinations
• Consideration Paid Allocation: Income Taxes
• Reduction Of Acquiring Entity's Tax Asset Valuation Allowance
• Uncertain Income Tax Positions In Business Combinations
• Deferred Income Taxes For Research And Development Activities
• Deferred Income Taxes For Goodwill
• Deferred Income Taxes For Acquisition Costs
• Paragraphs 805-20-30-14 Through 30-16: Initial Measurement—General
• Assets And Liabilities Of An Acquired Entity's Pension Plan
• Other Post-Retirement Benefits Of An Acquired Entity
• Paragraph 805-20-30-17: Initial Measurement—General
• Exit, Employee Relocation, And Involuntary Termination Costs
• Paragraphs 805-20-30-18 Through 30-20: Initial Measurement—General
• Recognition Of Reacquired Rights
• Paragraph 805-20-30-21: Initial Measurement—General
• Replacement Share-Based Payment Awards
• Accounting Procedures For Replacement Share-Based Payment Awards
• Paragraphs 805-20-30-22 And 30-23: Initial Measurement—General
• Assets Held For Sale
• Paragraphs 805-20-35-1 Through 35-3: Subsequent Measurement—General
• Subsequent Measurement And Accounting For Contingent Assets And Liabilities
• Paragraphs 805-20-35-4 And 35-4A: Subsequent Measurement—General
• Measurement Of Indemnification Assets
• Paragraphs 805-20-35-5 Through 35-8: Subsequent Measurement—General
• Paragraphs 805-20-40-1 Through 40-3: Derecognition—General
• Paragraphs 805-20-50-1 Through 50-5: Disclosure—General
• Paragraphs 805-20-55-1 Through 55-60: Implementation Guidance And Illustrations—General Business Combinations—Goodwill Or Gain From Bargain Purchase, Including Consideration Transferred (805-30)
• Paragraphs 805-30-05-1 And 05-2: Overview And Background—General
• Paragraph 805-30-15-1: Scope And Scope Exceptions—General

Section 805-30-20: Glossary

• Paragraphs 805-30-25-1 Through 25-4: Recognition—General
• Bargain Purchases
• Paragraphs 805-30-25-5 Through 25-7: Recognition—General
• Contingent Consideration
• Classification Of Contingent Consideration
• Paragraphs 805-30-30-1 Through 30-6: Initial Measurement—General
• Recognizing And Measuring Goodwill In A Business Combination
• Recognizing And Measuring Goodwill In An Acquisition Of Less Than A Wholly Owned Subsidiary (Partial Acquisition That Results In A Controlling Interest)
• Preexisting Goodwill On Acquiree Financial Statements
• Measuring Goodwill Without Transferring Consideration
• Paragraph 805-30-30-7: Initial Measurement—General
• Consideration Transferred
• Sample Calculation Of Consideration Exchanged In A Business Combination
• Paragraph 805-30-30-8: Initial Measurement—General
• Nonmonetary Exchange Can Result In A Business Combination
• Paragraphs 805-30-30-9 Through 30-13: Initial Measurement—General
• Paragraphs 805-30-35-1 And 35-1A: Subsequent Measurement—General
• Subsequent Accounting For Contingent Consideration
• Paragraphs 805-30-35-2 And 35-3: Subsequent Measurement—General
• Replacement Of Share-Based Payment Awards
• Paragraphs 805-30-50-1 Through 50-4: Disclosure—General
• Paragraphs 805-30-55-1 Through 55-24: Implementation Guidance And Illustrations—General Business Combinations—Reverse Acquisitions (805-40)
• Paragraphs 805-40-05-1 And 05-2: Overview And Background—General
• Paragraphs 805-40-15-1 And 15-2: Scope And Scope Exceptions—General

Section 805-40-20: Glossary

• Paragraph 805-40-25-1: Recognition—General
• Reverse Acquisitions
• Measurement Of Noncontrolling Interest In A Reverse Acquisition
• Determining The Acquirer In A Reverse Acquisition Involving Three Entities: A Case Report
• Merger Of A Private Entity Into A Public Shell Corporation
• Paragraph 805-40-25-2: Recognition—General
• Paragraphs 805-40-30-1 Through 30-4: Initial Measurement—General
• Paragraphs 805-40-45-1 Through 45-5: Other Presentation Matters—General
• Paragraphs 805-40-55-1 Through 55-23: Implementation Guidance And Illustrations—General Business Combinations—Related Issues (805-50)
• Paragraphs 805-50-05-1 And 05-2: Overview And Background—General
• Paragraph 805-50-05-3: Overview And Background—Acquisition Of Assets Rather Than A Business
• Paragraphs 805-50-05-4 And 05-5: Overview And Background—Transactions Between Entities Under Common Control
• Paragraphs 805-50-05-6 Through 05-8: Overview And Background—New Basis Of Accounting (Pushdown)
• Paragraph 805-50-15-1: Scope And Scope Exceptions—General
• Paragraphs 805-50-15-2 Through 15-4: Scope And Scope Exceptions—Acquisition Of Assets Rather Than A Business
• Paragraphs 805-50-15-5 Through 15-6A: Scope And Scope Exceptions—Transactions Between Entities Under Common Control
• Paragraphs 805-50-15-7 Through 15-9: Scope And Scope Exceptions—New Basis Of Accounting (Pushdown)

Section 805-50-20: Glossary

• Paragraph 805-50-25-1: Recognition—Acquisition Of Assets Rather Than A Business
• Paragraph 805-50-25-2: Recognition—Transactions Between Entities Under Common Control
• Transfers Between Entities Under Common Control: Basis Of Transfer
• Combinations Of Entities Under Common Control Or Common Ownership: Some Additional Observations
• Paragraph 805-50-25-3: Recognition—New Basis Of Accounting (Pushdown)
• Pushdown Basis Of Accounting
• Pushdown Basis Of Accounting: Some Additional Observations
• Pushdown Accounting And Collaborative Groups
• Mechanics Of Pushdown Accounting
• Pushdown Of Debt
• Paragraphs 805-50-30-1 Through 30-4: Initial Measurement—Acquisition Of Assets Rather Than A Business
• Accounting For Asset Acquisitions
• Paragraphs 805-50-30-5 And 30-6: Initial Measurement—Transactions Between Entities Under Common Control
• Paragraphs 805-50-30-7 Through 30-9: Initial Measurement—New Basis Of Accounting (Pushdown)
• Paragraph 805-50-35-1: Subsequent Measurement—Acquisition Of Assets Rather Than A Business
• Paragraphs 805-50-45-1 Through 45-5: Other Presentation Matters—Transactions Between Entities Under Common Control
• Capital Contribution Of A Sister Subsidiary From A Common Parent After The Balance-Sheet Date But Before Issuance Of The Financial Statements
• Paragraphs 805-50-50-1 Through 50-4: Disclosure—Transactions Between Entities Under Common Control

SECTION II: Iterpretations of TOPIC 350,

• Intangibles––Goodwill And Other
• Intangibles—Goodwill And Other—Overall (350-10)
• Paragraphs 350-10-05-1 Through 05-7: Overview And Background—General
• Paragraphs 350-10-15-1 Through 15-4: Scope And Scope Exceptions—General

Section 350-10-20: Glossary

• Intangibles—Goodwill And Other—Goodwill (350-20)
• Paragraphs 350-20-05-1 Through 05-3: Overview And Background—General
• Paragraphs 350-20-15-1 Through 15-3: Scope And Scope Exceptions—General

Section 350-20-20: Glossary

• Paragraphs 350-20-25-1 Through 25-3: Recognition—General
• Paragraphs 350-20-35-1 Through 35-21: Subsequent Measurement—General
• Components, Operating Segments, Reporting Segments, And Reporting Units
• Determining The Fair Value Of A Reporting Unit In Goodwill Impairment Testing
• Electing To Perform The Second Step Of The Goodwill Impairment Test
• Overview And Example Of Goodwill Impairment Testing
• Considering Income Taxes In The Goodwill Impairment Test
• Goodwill Impairment Testing And Noncontrolling Interest
• Impact On Step One Of The Goodwill Impairment Test When The Reporting Unit Has A Negative Carrying Amount
• Immediate Impairment Of Goodwill In An Acquired Business
• Allocating The Fair Value Of A Reporting Unit To Unrecognized Intangible Assets In The Second Step Of The Goodwill Impairment Test
• Paragraphs 350-20-35-22 Through 35-27: Subsequent Measurement—General
• Measuring The Fair Value Of A Reporting Unit That Has Publicly Traded Equity Securities
• Measuring The Fair Value Of A Reporting Unit To Be Sold
• Measuring The Fair Value Of A Reporting Unit To Be Partially Sold
• Measuring The Fair Value Of A Reporting Unit To Be Disposed Of In A Spin-Off To Shareholders
• Quoted Market Price Available For The Entity As A Whole But Not For An Individual Reporting Unit
• Changing Method To Estimate Reporting Unit's Fair Value From Period To Period
• Paragraphs 350-20-35-28 Through 35-32: Subsequent Measurement—General
• Selecting The Annual Date
• Discretionary Change In Date Of Annual Test
• Considering The Long-Lived Asset Impairment Test When Performing The Goodwill Impairment Test
• Paragraphs 350-20-35-33 Through 35-38: Subsequent Measurement—General
• Identifying Reporting Units
• Aggregation Of Reporting Units
• Paragraphs 350-20-35-39 And 35-40: Subsequent Measurement—General
• Assigning Assets And Liabilities To Reporting Units
• Determining The Carrying Amount Of A Reporting Unit That Includes Foreign Entities With A Different Functional Currency Than The Parent Entity
• Determining The Carrying Amount Of A Reporting Unit When The Reporting Unit Is The Entity As A Whole
• Paragraphs 350-20-35-41 Through 35-44: Subsequent Measurement—General
• Adjusting Subsidiary Goodwill For Amounts Assigned By A Parent To The Subsidiary Reporting Unit
• Paragraphs 350-20-35-45 Through 35-61: Subsequent Measurement—General
• Paragraphs350-20-45-1 Through 45-3: Other Presentation Matters—General
• Paragraphs 350-20-50-1 And 50-2: Disclosure—General
• Paragraphs 350-20-55-1 Through 55-24: Implementation Guidance And Illustrations—General Intangibles—Goodwill And Other—General Intangibles Other Than Goodwill (350-30)
• Paragraph 350-30-05-1: Overview And Background—General
• Paragraphs 350-30-15-1 Through 15-5: Scope And Scope Exceptions—General

Section 350-30-20: Glossary

• Paragraphs 350-30-25-1 Through 25-4: Recognition—General
• Paragraphs 350-30-30-1 And 30-2: Initial Measurement—General
• Paragraphs 350-30-35-1 Through 35-5B: Subsequent Measurement—General
• Determining The Useful Life Of Intangible Assets
• Evaluating The Cost Of Renewing An Intangible Asset
• Determining The Useful Life Of A Customer Relationship Intangible Asset
• Sec Staff Views On Indefinite-Lived Intangible Assets
• Useful Life Of Reacquired Rights
• Intangible Assets For Product Lines Being Phased Out
• Long-Term Power Sales Contracts
• Acquisition Of Insurance Contracts In Connection With The Acquisition Of A Life Insurance Entity
• Write-Offs Of Intangible Assets Shortly After The Acquisition Date: Sec Staff Views
• Determining The Useful Life Of Defensive Intangible Assets
• Paragraphs 350-30-35-6 Through 35-13: Subsequent Measurement—General
• Amortization Of Intangibles: Sec Staff Views
• Amortization Method For Customer Relationship-Related Intangible Assets
• Amortization Of Premium Paid For Purchased Credit Card Portfolio
• Paragraphs 350-30-35-14 Through 35-28: Subsequent Measurement—General
• Determining The Unit Of Measure For Evaluating Impairment Of Intangible Assets That Have Indefinite Lives
• Paragraphs 350-30-45-1 Through 45-3: Other Presentation Matters—General
• Paragraphs 350-30-50-1 Through 50-5: Disclosure—General
• Paragraphs 350-30-55-1 Through 55-40: Implementation Guidance And Illustrations—General
• Paragraph 350-30-65-1 And 65-2: Transition And Open Effective Date Information—General Intangibles—Goodwill And Other—Internal-Use Software (350-40)
• Paragraphs 350-40-05-1 Through 05-9: Overview And Background—General
• Paragraphs 350-40-15-1 Through 15-7: Scope And Scope Exceptions—General

Section 350-40-20: Glossary

• Paragraphs 350-40-25-1 Through 25-16: Recognition—General
• Paragraphs 350-40-30-1 Through 30-4: Initial Measurement—General
• Paragraphs 350-40-35-1 And 35-10: Subsequent Measurement—General
• Paragraph 350-40-50-1: Disclosure—General
• Paragraphs 350-40-55-1 And 55-4: Implementation Guidance And Illustrations—General Intangibles—Goodwill And Other—Website Development Costs (350-50)
• Paragraph 350-50-05-1: Overview And Background—General
• Paragraphs 350-50-15-1 Through 15-3: Scope And Scope Exceptions—General
• Paragraphs 350-50-25-1 Through 25-17: Recognition—General
• Paragraphs 350-50-55-1 Through 55-9: Implementation Guidance And Illustrations—General

SECTIONIII: INTERNATIONAL FINANCIAL REPORTING STANDARD 3, BUSINESS COMBINATIONS

• Paragraphs 1 Through 3
• Definition Of A Business
• Reorganization Of Entities Under Common Control
• No Scope Exception For Not-For-Profit Entities
• Paragraphs 4 Through 7
• Identifying The Acquirer
• Reverse Acquisitions
• Paragraphs 8 And 9
• Determining The Acquisition Date
• Paragraphs 10 Through 17
• Recognition Of Identifiable Assets And Liabilities Such As Restructuring And Exit Costs
• Recognizing Particular Assets Acquired And Liabilities Assumed: Operating Leases
• Recognition Of Intangible Assets Separately From Goodwill
• Paragraphs 18 Through 20

Nina Dorata earned a Ph.D. in accounting from Rutgers, The State University of New Jersey in 2003. She holds a B.S. in Accounting and a M.B.A. in Taxation from St. John’s University. Dr. Dorata is a certified public accountant in New York.

Before joining the faculty at St. John’s University, Dr. Dorata taught at the State University of New York at the College of Old Westbury, where she served as chair of the Accounting and Business Law Department. Additionally, Dr. Dorata taught at St. Joseph’s College. Dr. Dorata has taught numerous courses in financial and managerial accounting on both graduate and undergraduate curriculums.

Dr. Dorata’s professional experience includes working as an auditor for Price Waterhouse & Co. where she provided services to clients in the financial services and manufacturing industries. She was an Assistant Vice President of Corporate Accounting for E.F. Hutton & Co. Inc. and a Director of Financial Reporting at Staff Builders Inc.

Dr. Dorata’s research interest is primarily financial reporting and capital markets. She has presented numerous papers to academic forums and has published in peer reviewed journals such as Journal of Accounting, Auditing and Finance, Journal of Applied Business Research, Managerial Finance, Accounting Forum, Review of Business, and The CPA Journal.

Dr. Dorata is a member of the AICPA, the New York State Society of Certified Public Accountants, and the American Accounting Association.