Resources for Accounting for Business Combinations (ASC 805)
Resources for Accounting for Business Combinations (ASC 805)

Resources for Accounting for Business Combinations (ASC 805)

While accounting for business combinations has experienced some changes in recent years, it is by no means new guidance. That said, the fact that it is not new has not prevented it from being one of the most read and researched topics on our blog! Why? Because it’s complicated, and it may not be the type of transaction an entity enters into frequently.

FASB Guidance

A great first place to begin is always at the source of all knowledge. And when dealing with ASC 805, that source is the FASB’s codification. You’ll need a subscription to be able to view the full codification, but if all you need is just the most recently issued guidance made available through Accounting Standard Updates (ASUs), you can see the list of those here.

While it is the only authoritative source of guidance, we all know that FASB can be a little hard to digest. Therefore, we’d also like to point you to some of our more easily-understood sources of wholistic guidance, starting with the guides published by the Big 4 firms.

Big 4 Resources

The guides published by the Big 4 firms are some of our favorite resources when it comes to figuring out how to actually put into practice the requirements of a standard. Generally speaking, these guides present the requirements of the FASB and then offer an interpretation of what that guidance actually means in practice. These guides are also usually chock-full of illustrative examples and scenarios. Why collect all four? Because sometimes the guidance isn’t clear and getting the interpretations of the four largest firms in the world can be quite helpful when deciding which path to take.

  1. EY’s Financial Reporting Developments, Business Combinations – While this guide does not have the fancy graphics that some of the other guides boast, it makes up for it with ample illustrative examples throughout its 442 pages! The format of this guide also makes it very easy to distinguish between the FASB’s codification and EY’s interpretation.
  2. PwC’s Accounting Guide, Business Combinations and Noncontrolling Interests – Coming in at approximately 511 pages, this guide is not only thorough, but also a great resource for anyone needing to understand the similarities and differences between accounting for business combinations under ASC 805 and IFRS 3.
  3. KPMG’s Handbook, Business Combinations – The new branding and design considerations in KPMG’s Handbook series make them some of my favorite resources. At 753 pages, this Handbook is full of illustrations and flowcharts to help make sense of complex guidance and has plenty of practical examples. The interactive table of contents is also a handy feature when trying to navigate through such a long document!
  4. Deloitte’s A Roadmap to Accounting for Business CombinationsWith only 359 pages, this guide is the shortest of the four, but manages to pack quite a punch. It discusses business combinations, pushdown accounting, common-control transactions, asset acquisitions, and SEC reporting requirements. It also features helpful graphics and an interactive table-of-contents, like the KPMG Handbook.

Online Learning Solutions

Want something thorough, but maybe not quite as thorough as a 350+ page document? Or maybe you’re just getting ready to tackle the accounting for the first time and want a complete overview of the requirements of ASC 805? If that’s the case, you should check out our collection of online courses on the Revolution, including:

  1. Business Combinations: Overview of ASC 805 – In this course, key concepts will be discussed, including the definition of a business, the recognition and measurement principles, and the calculation of goodwill.
  2. Business Combinations: Advanced Issues and Disclosures – Now that you are familiar with the basic accounting rules, this course dives deeper into more advanced business combination issues such as exceptions to general guidelines, noncontrolling interests, and measurement period adjustments. ASC 805 disclosure requirements are also discussed.
  3. Business Combinations: Application of ASC 805 – This course will put that knowledge to the test by walking through an example acquisition and requiring you to identify the proper accounting treatment!

Want the best deal on these great CPE-eligible courses? Check out our course collection and save!

GAAPology Blog Posts

Not a fan of 350+ page documents? Don’t need CPE? Or maybe you just need a specific answer to a specific question? Well, you’re in luck! We’ve been quite busy posting about this topic on our blog, GAAPology. Here are the links to some of our favorites:

  1. Navigating ASC Topic 805: Business Combination or Asset Purchase?
  2. Is it a Business (ASC 805)? ASU 2017-01 Provides Clarity!
  3. Merger of Equals? Business Combinations Must have an Acquirer!
  4. 5 Issues Related to Accounting for Business Combinations under ASC 805
  5. Business Combinations (ASC 805): Measurement Period Adjustments
  6. Business Combinations: Accounting under ASC 805 versus IFRS 3!
  7. Accounting for Business Combinations ASC 805: Contingent Consideration

Other Resources

And finally, one last article from the Journal of Accountancy to help accountants prepare for the accounting and reporting challenges that come along with the prospect of a business combination, including the involvement of the valuation team, what to do after the transaction closes, and internal control considerations.

So, there you have it! Some of our favorite resources to help you wrap your head around accounting for business combinations. If you have any questions or want to see a future blog about a specific topic or transactions, please use the comments to let us know!


This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.

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Comments (2)

  1. Tyler Gambill:
    Jul 09, 2019 at 03:15 PM

    Just in time! I was doing research on this exact topic when an email came through about this blog post. Its great to have these resources all in one place, thanks for putting this together.

  2. Matt:
    Jul 22, 2019 at 08:15 AM

    Hi, I have a very strange situation. My company acquired 50.5% of interets in an associate in November 2018 for 2,6M. it was determined that the my company had significant influence and therefore the investment was equity accounted for. In June 2019 they increased the board member and we obtained control and thus this will be consolidated.
    Since no consideration was paid and the Fair Value of the net asset of my subsidairy is let's say 3,4Mio (100%), what are the entries to recognise the goodwill. My understanding is I have to recongnise 49,5% of non controlling interests 1.74M (3.4m*49.5%) and how do I book the goodwill on the transaction?


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