FASB proposed Tuesday, Dec. 15, a new accounting standard designed to increase consistency in the accounting for revenue contracts with customers acquired in a business combination.
The proposed Accounting Standard Update (ASU) would provide guidance on Topic 805, Business Combinations, which would require an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers.
The proposed ASU would not affect the accounting for other assets or liabilities that may arise from revenue contracts from customers in a business combination, such as customer-related intangible assets and contract-based intangible assets. See more.