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SEC Guidance for Pushdown Accounting Deleted From U.S. GAAP

The FASB published an amendment to U.S. GAAP to complete a process that began with the publication of an update for pushdown accounting by newly acquired businesses. The latest amendment aligns the FASB’s codification with the related material in the SEC’s staff accounting bulletins.

The FASB published Accounting Standards Update (ASU) No. 2015-08, Business Combinations (Topic 805): Pushdown Accounting—Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 , on May 11, 2015.

The update to U.S. GAAP completes a process the FASB initiated in November 2014 when it published ASU No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting (a Consensus of the FASB Emerging Issues Task Force) , and the SEC released Staff Accounting Bulletin (SAB) No. 115. The SEC bulletin removed the guidance in SAB Topic 5.J, New Basis of Accounting Required in Certain Circumstances , which was related to the amendments in ASU No. 2014-17. In ASU No. 2015-08, the FASB deleted the related SEC material from its Accounting Standards Codification.

The FASB views the latest set of amendments as essentially a clean-up to ensure that the text in its guidance matches the content in the SEC’s staff accounting bulletins.

In ASU No. 2014-17, the FASB said it was providing guidance for newly acquired businesses and organizations that prepare financial statements separately from their parents. The amendments to FASB ASC 805, Business Combinations , gave acquired companies the option of having the accounting basis used by their new parents “pushed down” onto their financial statements after the deal has closed.

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