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paragraph 2, sequence 2.1.1] or an acquisition by a not-for-profit entity. [FAS 164, paragraph 2, sequence 2.1.2] The guidance is presented in the following three Subsections:

  • a.

    General

  • b.

    Merger of Not-for-Profit Entities

  • c.

    Acquisition by a Not-for-Profit Entity.

958-805-05-2 The General Subsections provide overall guidance on the recognition of combinations involving NFPs, and they provide implementation guidance for determining whether a combination between an NFP and one or more businesses, nonprofit activities, or another NFP is a merger or an acquisition.

958-805-05-3 Paragraphs presented in bold type in this Subtopic state the main principles. All paragraphs have equal authority. [FAS 164, paragraph 1, sequence 1.3]

Merger of Not-for-Profit Entities

958-805-05-4 The Merger of Not-for-Profit Entities Subsections establish standards of financial accounting and reporting for transactions or other events that meet the definition of a merger of not-for-profit entities. Specifically, these Subsections establish principles and requirements for how a not-for-profit entity (NFP) does both of the following:

  • a.

    Applies the carryover method in accounting for a merger [FAS 164, paragraph 1(b), sequence 1.1.2]

  • b.

    Determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger. [FAS 164, paragraph 1(d), sequence 1.1.4]

Acquisition by a Not-for-Profit Entity

958-805-05-5 The Acquisition by a Not-for-Profit Entity Subsections establish standards of financial accounting and reporting for transactions or other events that meet the definition of an acquisition by a not-for-profit entity. Those standards are incremental to the guidance in Subtopics 805-10, 805-20, and 805- 40. Specifically, these Subsections establish principles and requirements for how a not-for-profit entity does both of the following:

  • a.

    Applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer [FAS 164, paragraph 1(c), sequence 1.1.3]

  • b.

    Determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of an acquisition. [FAS 164, paragraph 1(d), sequence 1.1.4]

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