PUsh Down Accounting

Topics: Types of business entity, U.S. Securities and Exchange Commission, Financial Accounting Standards Board Pages: 35 (10054 words) Published: December 2, 2014
No. 2014-17
November 2014

Business Combinations (Topic 805)

Pushdown Accounting
a consensus of the FASB Emerging Issues Task Force

An Amendment of the FASB Accounting Standards Codification®

The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. An Accounting Standards Update is not authoritative; rather, it is a document that communicates how the Accounting Standards Codification is being amended. It also provides other information to help a user of GAAP understand how and why GAAP is changing and when the changes will be effective.

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Accounting Standards Update

No. 2014-17
November 2014

Business Combinations (Topic 805)

Pushdown Accounting
a consensus of the FASB Emerging Issues Task Force

An Amendment of the FASB Accounting Standards Codification®

Financial Accounting Standards Board

Accounting Standards Update 2014-17
Business Combinations (Topic 805)
Pushdown Accounting
November 2014
CONTENTS
Page
Numbers
Summary ...........................................................................................................1–3 ®
Amendments to the FASB Accounting Standards Codification .....................5–18 Background Information and Basis for Conclusions ......................................19–28 Amendments to the XBRL Taxonomy .................................................................29

Summary
Why Is the FASB Issuing This Accounting Standards
Update (Update)?
Current generally accepted accounting principles (GAAP) offer limited guidance for determining whether and at what threshold an acquiree (acquired entity) can reflect the acquirer’s accounting and reporting basis (pushdown accounting) in its separate financial statements. Securities and Exchange Commission (SEC) Staff Accounting Bulletin Topic No. 5.J, New Basis of Accounting Required in Certain Circumstances, Emerging Issues Task Force (EITF) Topic No. D-97, “PushDown Accounting,” and other comments made by the SEC Observer at EITF meetings provide guidance on pushdown accounting for SEC registrants. However, because the SEC staff’s guidance applies only to SEC registrants, no guidance exists for the application of pushdown accounting for entities that are not SEC registrants.

The objective of this Update is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements.

Who Is Affected by the Amendments in This Update?
The amendments in this Update apply to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity (either public or nonpublic) upon the occurrence of...
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