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    > Consideration Transferred, including Contingent Consideration

958-805-25-32 An NFP acquirer might transfer consideration to the former owner of the acquiree or to a designee of the former owner. The NFP acquirer also might receive assistance from an unrelated third party, which shall be taken into account in measuring the consideration transferred. Examples of potential forms of consideration include any of the following: [FAS 164, paragraph 56, sequence 56.2]

  • a.

    Cash [FAS 164, paragraph 56, sequence 56.2.1]

  • b.

    Other assets [FAS 164, paragraph 56, sequence 56.2.2]

  • c.

    A business or a nonprofit activity of the acquirer [FAS 164, paragraph


56, sequence 56.2.3] Contingent consideration. [FAS 164, paragraph 56, sequence 56.2.4]

958-805-25-33 An asset transferred by an NFP acquirer to an unrelated third party as a required condition of an acquisition shall be accounted for as consideration transferred for the acquiree unless the NFP acquirer retains control over the transferred assets. [FAS 164, paragraph 57, sequence 57.1] Example 4 (see paragraphs 958-805-55-57 through 55-58) illustrates assistance received from a third party.

958-805-25-34 The consideration transferred may include assets or liabilities of the NFP acquirer that have carrying amounts that differ from their fair values at the acquisition date (for example, nonmonetary assets or a business of the acquirer). If so, the NFP acquirer shall recognize the resulting gains or losses, if any, in the statement of activities. However, sometimes the transferred assets or liabilities remain within the combined entity after the acquisition, and the acquirer therefore retains control of them. [FAS 141(R), paragraph 40, sequence 107] An NFP acquirer that retains control over the transferred assets shall not recognize a gain or loss in the statement of activities on assets or liabilities it controls both before and after the acquisition. [FAS 164, paragraph 57, sequence 57.1.2]

958-805-25-35 Examples of asset transfers in which control over the future economic benefits of the transferred assets is retained by the acquirer include all of the following: [FAS 164, paragraph 57, sequence 57.1.3]

  • a.

    The assets are transferred to the acquiree rather than to its former owners or are otherwise transferred to a recipient that is controlled by the acquirer. By virtue of its control over the recipient, the acquiring entity has the ability to revoke the transfer or to direct the use of the assets to itself or an affiliate. [FAS 164, paragraph 57, sequence



  • b.

    The asset transfer is otherwise revocable, repayable, or refundable. [FAS 164, paragraph 57, sequence]

  • c.

    The assets are transferred with the stipulation that they be used on behalf of, or for the benefit of, the acquiree, the acquirer, the


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