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958-805-55-61 NFP G might satisfy the requirements of paragraph 805-10-50- 2(a) through (d) and paragraph 958-805-50-11(a) as shown in the illustrative note below. [FAS 164, paragraph A126, sequence 227.1.1]

Note X: Acquisition of Restaurant H

On February 10, 20X0, NFP G acquired Restaurant H, a local restaurant, which it converted into a soup kitchen. NFP G acquired Restaurant H as part of furthering its mission to care for the needy. The acquisition was effected by purchasing 100 percent of the ownership interests in Restaurant H. [FAS

164, paragraph A126, sequence 227.2]

Because the operations of the soup

kitchen are expected to


predominantly supported by contributions and returns on investments, NFP G has recognized the excess of the consideration transferred over the net assets acquired as a separate charge in its statement of activities rather than as goodwill. NFP G paid consideration of $525,000 for Restaurant H. On the acquisition date, the net identifiable assets of Restaurant H were $410,000. The excess of the amount paid over the net identifiable assets acquired represents the value of Restaurant H’s assembled workforce, which is not recognized as a separate intangible asset, and the value of Restaurant H’s earnings potential as a restaurant to other potential buyers. [FAS 164, paragraph A126, sequence 227.3]

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    > Example 6: Donor Restriction on a Contribution Received

958-805-55-62 This Example illustrates application of the guidance in paragraphs 958-805-25-31, 958-805-30-8 through 30-9, and 958-805-45-5 through 45-7. [FAS 164, paragraph A123, sequence 224] The Example has the following Cases:



The inherent contribution is not subject to additional restrictions (Case A) The inherent contribution is subject to additional restrictions (Case B).

958-805-55-63 Cases A and B share the following assumptions.

958-805-55-64 Charity I acquires Charity J. Charity I transfers no consideration in exchange for Charity J. The acquisition was achieved by, in effect, a gift of Charity J to Charity I. The fair values of Charity J’s assets and liabilities, including donor-imposed restrictions, at the acquisition date follow. [FAS 164, paragraph A127, sequence 228.1]


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