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Other Presentation Matters Merger of Not-for-Profit Entities

958-805-45-1 The {Glossary link} not-for-profit entity {Glossary link} (NFP) resulting from a {Glossary link} merger of not-for-profit entities {Glossary link} is a new reporting entity, with no activities before the {Glossary link} merger date {Glossary link}. Thus, the new NFP’s initial reporting period begins with the merger date, and the merger itself shall not be reported as activity of the new NFP’s initial reporting period. Rather, the combined assets, liabilities, and net assets of the merging entities are included in the statement of position as of the beginning of that initial reporting period, if presented. [FAS 164, paragraph 15, sequence 15]

958-805-45-2 The new NFP’s statement of activities and statement of cash flows for its initial reporting period shall do both of the following: [FAS 164, paragraph 16, sequence 16.1]

  • a.

    Include in the reported amounts as of the beginning of the period (the opening amounts), such as cash and cash equivalents at the beginning of the period, the combined amounts of the merging entities’ assets, liabilities, and net assets (in total and by classes of net assets) as of the merger date. The following changes shall be reflected in the opening amounts: [FAS 164, paragraph 16, sequence 16.1.1]

    • 1.

      Accounting changes necessary to adjust a merging entity’s financial statements to generally accepted accounting principles (GAAP) in accordance with paragraph 958-805-25-7 [FAS 164, paragraph 16, sequence]

    • 2.

      Accounting changes to conform the individual accounting policies of the merging entities in accordance with paragraph 958-805-30-2 [FAS 164, paragraph 16, sequence]

    • 3.

      Changes to eliminate intra-entity balances in accordance with paragraph 958-805-30-4. [FAS 164, paragraph 16, sequence



  • b.

    Report activity from the merger date through the end of the reporting period. [FAS 164, paragraph 16, sequence 16.1.2]

Acquisition by a Not-for-Profit Entity

958-805-45-3 The financial statements of an {Glossary link} acquirer {Glossary link} (the combined entity) shall report an {Glossary link} acquisition by a not-for-profit entity {Glossary link} as activity of the period in which it occurs. [FAS 164, paragraph 70, sequence 70]

  • >

    Statement of Activities

958-805-45-4 A not-for-profit entity (NFP) acquirer shall report the excess amount recognized in accordance with the guidance in paragraph 958-805-25-29


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