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.