FASB Issues Business Combinations Statements.

• Author: Heffes, Ellen M.
• Position: Brief Article

Culminating months of redeliberations on substantive issues raised by constituents in connection with the proposal on Business Combinations and Intangible Assets, on July 20 the Financial Accounting Standards Board issued two final statements. Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets, replace APB Opinion Nos. 16 and 17, respectively.

The statements will change the accounting for business combinations and goodwill in two significant ways. Statement 141 improves the transparency of the accounting and reporting for business combinations by requiring that all business combinations initiated after June 30, 2001 be accounted for under one single method -- the purchase...