FASB to Propose Additional Disclosure for Acquisitions

The Financial Accounting Standards Board plans to take up the issue of accounting for acquisitions. Several issues associated with disclosure of transactions relating to acquisitions were decided last month and reported in a recent FASB Action Alert.

The Board has proposed that, among other items of disclosure, companies provide separate disclosure of revenue and net income of acquired companies, if practicable, for at least the period from the date of acquisition to the end of the fiscal year of acquisition. Currently, while companies must report all the income of acquired entities, there is not a requirement that separate revenue figures for the acquired company be reported.

"Users [of financial statements] indicated to us that it would be helpful to have this information, especially in the period following an acquisition when a lot of things are going to change," said Ron Bassio, a project manager at FASB.

While shareholders might rejoice at the additional information, it remains to be seen whether companies will acquiesce and provide the disclosure information about acquired entities. "This is a soft requirement," said Mr. Bassio. "[Auditors] might not be able to do it with all companies."

The FASB expects to issue a series of new accounting requirements for business combinations before the end of the year. The new rules will be incorporated into FASB 141, Business Combinations as additions and modifications.

You may like these other stories...

Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
The Financial Accounting Standards Board (FASB) has relaunched its technical agenda web page, which Chairman Russell Golden said will inform visitors at a glance on where any given FASB project stands, the steps it took to...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.