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carryforwards. However, deferred tax credits that arise after the date of a business combination shall be accounted for in the same manner as for leveraged leases that were not acquired in a purchase business combination.

68.

Amend paragraph 840-30-55-50 and its

related

heading,

with

a

link

to

transition paragraph 958-805-65-1, as follows:

  • >

    > Example 5: Leveraged Lease Acquired in a Business Combination or an

Acquisition by a Not-for-Profit Entity

840-30-55-50 This Example illustrates one way that a lessor’s investment in a leveraged lease might be valued by the acquiring entity in a business combination or an acquisition by a not-for-profit entity [FIN 21, paragraph 16, sequence 39.1.1.1] and the subsequent accounting for the investment in accordance with the guidance in this Subtopic. The elements of accounting and reporting illustrated for this Example are as follows:

    • a.

      Acquiring entity’s cash flow analysis by years (see paragraph 840-30- 55-52)

    • b.

      Acquiring entity’s valuation of investment in the leveraged lease (see paragraph 840-30-55-53)

    • c.

      Acquiring entity’s allocation of annual cash flow to investment and income (see paragraph 840-30-55-54)

    • d.

      Journal entry for recording allocation of purchase price to net investment in the leveraged lease (see paragraph 840-30-55-55)

    • e.

      Journal entries for the year ending December 31, 1984 (Year 10 of the lease) (see paragraph 840-30-55-56).

  • 69.

    Amend paragraph 845-10-15-4, with a link to transition paragraph 958-805-

65-1, as follows:

845-10-15-4 The guidance in the Nonmonetary Transactions Topic does not apply to the following transactions:

  • a.

    A business combination accounted for by an entity according to the provisions of Topic 805 or a combination accounted for by a not-for- profit entity according to the provisions of Subtopic 958-805 [APB 29, paragraph 4(aa), sequence 47.1]

  • b.

    A transfer of nonmonetary assets solely between entities or persons under common control, such as between a parent and its subsidiaries or between two subsidiaries of the same parent, or between a corporate joint venture and its owners

  • c.

    Acquisition of nonmonetary assets or services on issuance of the capital stock of an entity under Subtopics 718-10 and 505-50

  • d.

    Stock issued or received in stock dividends and stock splits that are accounted for in accordance with Subtopic 505-20

99

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