Wiley GAAP 2018 part2

Description

ch30 30: ASC 410 Asset Retirement and Environmental Obligations Perspective and Issues Subtopics Scope and Scope Exceptions ASC 410-20 ASC 410-30 Definitions of Terms Concepts, Rules, and Examples ASC 410-20, Asset Retirement Obligations Asset retirement obligations requiring recognition Examples of the scope of ASC 410-20 Example of timing of recognition Example of ongoing additions to the obligation Recognition Initial measurement Initially applying an expected present value method Allocation of an asset retirement obligation Changes due to passage of time Changes in estimates Funding and assurance provisions Rate-regulated entities Example—initial measurement and recognition Example—accounting in subsequent periods Electronic equipment waste obligations ASC 410-30, Environmental Obligations Environmental remediation liabilities ch31 31: ASC 420 Exit or Disposal Cost Obligations Perspective and Issues Subtopic Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Employee Termination Benefits Measurement Timing Examples of the determination of the minimum retention period and recognition Subsequent measurement Plan includes voluntary and involuntary benefits Contract Termination Costs Other Associated Costs to Exit an Activity Presentation and Disclosure ch32 32: ASC 430 Deferred Revenue ch33 33: ASC 440 Commitments Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Throughput and Take-or-Pay Contracts Example of a throughput contract Other Sources ch34 34: ASC 450 Contingencies Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples ASC 450-10, Overall ASC 450-20, Loss Contingencies Levels of probability Estimating the loss Events subsequent to balance sheet date Unasserted claims or assessments Estimate versus contingency Litigation ASC 450-30, Gain Contingencies Other Sources ch35 35: ASC 460 Guarantees Perspective and Issues Subtopic Scope and Scope Exceptions Product warranties Overview Definitions of Terms Concepts, Rules, and Examples Guarantees Initial recognition Example of estimating the fair value of a guarantee using CON 7 when recognition of a loss contingency under ASC 450 would not be otherwise required Example of estimating the fair value of a guarantee using CON 7 when recognition of a loss contingency under ASC 450 is also required Subsequent measurement Fees for guaranteeing a loan Impact of ASC 460 on revenue recognition on sales with a guaranteed minimum resale value Disclosure requirements Product Warranties Example of product warranty expense Other Sources ch36 36: ASC 470 Debt Perspective and Issues Subtopics Scope and Scope Exceptions ASC 470-20 ASC 470-30 ASC 470-40 ASC 470-50 Overview Definitions of Terms Concepts, Rules, and Examples ASC 470-10, Overall Due on demand loans Short-term obligations expected to be refinanced Example of short-term obligations to be refinanced Callable debt Increasing-rate debt Subjective acceleration clauses Debt with covenants Revolving credit agreements Indexed debt ASC 470-20, Debt with Conversion and Other Options Convertible debt-overall Commitment date General section Example of accounting for a bond with a detachable warrant Debt issued with conversion features and stock warrants Example of convertible debt issued with stock warrants Convertible debt without beneficial conversion Example of conversion of convertible debt without beneficial conversion Convertible securities with beneficial conversion features Accounting treatment of beneficial conversion features Instruments paid-in-kind Instruments issued as a repayment for nonconvertible instrument Derecognition Contingent conversion Example 1: Intrinsic value of a conversion feature—fixed dollar terms Example 2: Intrinsic value of a conversion feature—variable terms Example 3: Intrinsic value of a conversion feature—contingent price terms Example 4: Intrinsic value of a conversion feature—contingent conversion Example 5: Intrinsic value of a conversion feature—contingent conversion with variable terms Example of extinguishment of debt with an embedded conversion feature Contingent conversion rights triggered by issuer call Discount accretion and amortization Interest forfeiture Induced conversion of debt Example of induced conversion expense Convertible instrument granted or issued to a nonemployee Own-share lending arrangements related to a convertible debt issuance Cash conversion ASC 470-30, Participating Mortgage Loans Accounting by participating mortgage loan borrowers ASC 470-40, Product Financing Arrangements Example of a product financing arrangement Overview-Modifications, Extinguishments, and Troubled Debt Restructurings ASC 470-50, Modifications and Extinguishments Gain or loss on debt extinguishment Modifications and exchanges The 10% test 10% calculation considerations Modifications and extinguishments-accounting treatment Convertible debt Revolving debt agreements ASC 470-60, Troubled Debt Restructurings by Debtors Is the debtor experiencing financial difficulty? Has the creditor granted a concession? Recognition Example 1: Settlement of debt by exchange of assets Example 2: Restructuring with gain/loss recognized (payments are less than carrying value) Example 3: Restructuring with no gain/loss recognized (payments exceed carrying value) Example 4: Contingent payments ch37 37: ASC 480 Distinguishing Liabilities From Equity Perspective and Issues Subtopic Scope and Scope Exceptions Technical Alert Deferral of implementation Mandatorily redeemable financial instruments of nonpublic entities that are not SEC filers Certain mandatorily redeemable noncontrolling interests Overview Definitions of Terms Concepts, Rules, and Examples Initial Recognition and Measurement Obligations to issue a variable number of shares Certain Physically Settled Forward Purchase Contracts Obligations to Repurchase Shares Subsequent Measurement Certain physically settled forward purchase contracts Contingent consideration in a business combination Mandatorily Redeemable Shares and Similar Instruments Example of mandatorily redeemable stock Freestanding instrument involving multiple components that may be settled in a variable number of shares Application of ASC 480 Example—obligations that require net share settlement—monetary value changes in the same direction as the fair value of the issuer’s equity shares Example—obligations that require net share settlement—monetary value changes in opposite direction as the fair value of the issuer’s equity shares Example—written put options that require physical settlement Example—forward purchase contract that requires physical or net cash settlement Example—written put options that require net share settlement Example—unconditional obligation that must be either redeemed for cash or settled by issuing shares Example of mandatorily redeemable preferred shares Example of shares that are mandatorily redeemable at the death of the holder Example of mandatorily redeemable preferred shares (continued) Example of a contract with a fixed monetary amount known at inception Example of a written put option on a fixed number of shares Example of a put warrant Example of a forward contract with a variable settlement date ch38 38: ASC 505 Equity Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Legal Capital and Capital Stock Preferred stock Issuance of shares Example—treatment of par and no-par stock in a stock sale Stock issued in exchange for property or services Stock issued to employees for services Lump-sum sales Issuance costs Promise to register Stock Subscriptions Examples of stock subscription transactions Additional Paid-in Capital Examples of additional paid-in capital transactions Donated Capital Example of donated capital Retained Earnings Examples of retained earnings transactions ASC 505-20, Stock Dividends and Stock Splits Dividends Example of dividends Property dividends Scrip dividends Liquidating dividends Stock dividends Stock splits Example of small stock dividend Example of large stock dividend Distributions to shareholders having cash and stock components ASC 505-30, Treasury Stock Cost method Par value method Constructive retirement method Example of accounting for treasury stock Example of the cost and par value methods Other Treasury Stock Issues Takeover defense as cost of treasury stock Accelerated share repurchase programs Own-share lending arrangements related to convertible debt financing Other Equity Accounts ASC 505-50, Equity-based Payments to Nonemployees Measurement date When to recognize the fair value of the equity instruments Accounting prior to measurement date Measurement of fair value of the equity instrument portion of the transaction when certain terms are not known at inception Example of equity instruments issued to a third party Reporting prior to the measurement date when certain terms are not known Reporting after the measurement date when certain terms are not known Further guidance Consideration for future services Convertible Preferred Stock Example of convertible preferred stock ASC 505-60, Spin-offs and Reverse Spin-offs Spin-offs Reverse spin-offs Disclosure Requirements Other Sources ch39 39: ASC 605 Revenue Recognition Revenue Recognition-General Principles Technical Alert ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Subtopics Revenue recognition concerns Revenue recognition-general guidelines Issues in Revenue Recognition Barter transactions Mischaracterization of unusual transactions as components of gross revenue Mischaracterizing transactions as involving arm's-length, third parties, thus justifying unwarranted gain recognition Selling undervalued assets to generate reportable gains ASC 605-10, Overall Definitions of Terms Concepts, Rules, and Examples The Installment Method The Cost Recovery Method ASC 605-15, Products Perspective and Issues Channel Stuffing Sales where right of return exists Definitions of Terms Concepts, Rules, and Examples Example of sale with right of return Requirements for Revenue Recognition Met Requirements for Revenue Recognition not Met Future returns cannot be estimated Example: Future product returns—returns cannot be estimated Other Issues Accounting for revenues related to vaccine stockpiles ASC 605-20, Service Revenues Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Service versus Product Transactions Revenue Recognition Methods Example of proportional performance revenue recognition Expense Recognition Accounting treatment Losses on service transactions Initiation and Installation Fees Initiation or activation fees Installation fees Example of installation fees Other Guidance to Accounting for Service Transactions Freight services in process Reporting reimbursable costs Separately priced extended warranties Example of a separately priced product maintenance contract ASC 605-25, Multiple-Element Arrangements Perspective and Issues Terms Used in ASC 605-25 Overview Basic principles established Units of Accounting Example of a multiple deliverable arrangement Other Issues Fees for guaranteeing a loan ASC 605-28, Milestone Method Perspective and Issues Concepts, Rules, and Examples Other Issues Accounting for management fees based on a formula ASC 605-35, Construction-Type and Production-Type Contracts Perspective and Issues Deliberate Misstatement of Percentage of Completion on Long-Term Construction Contracts Definitions of Terms Concepts, Rules, and Examples Methods of Accounting The completed-contract method Preferability assessment Costs Incurred Precontract costs Contract costs Estimated costs to complete Subcontractor costs Back charges Example of a back charge situation Types of Contracts Fixed-price contracts Time-and-materials contracts Cost-type contracts Unit-price contracts Example of contract types Revenue Measurement Example of percentage-of-completion (cost-to-cost) and completed-contract methods with profitable contract Contract Losses Example of percentage-of-completion and completed-contract methods with loss contract Combining and Segmenting Contracts Accounting for transactions between participants Accounting for Change Orders Accounting for Contract Options Accounting for Claims Accounting Changes ASC 605-45, Principal-Agent Considerations Perspective and Issues Reporting Taxes Collected as Revenue Concepts, Rules, and Examples Factors to Consider Indicators of gross reporting (principals) Indicators of net reporting (agents) ASC 605-50, Customer Payments and Incentives Vendor's Accounting for Consideration Given to a Customer Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor Accounting for Consideration Given by a Service Provider to a Manufacturer or Reseller ch40 40: ASC 606 Revenue From Contracts With Customers Overview What Is Revenue? Revenue Revenue versus gains The New Revenue Standard Development of Revenue Guidance The Revenue Recognition Project The new standard Project goals Customer loyalty programs The Transition Resource Group Scope Scope exceptions Contracts partially in scope Sale or transfer of nonfinancial assets Effective Dates Other Changes Implementation Options Full retrospective approach Modified retrospective approach Objective of the Standard Core Principle and the Five Steps of the Revenue Recognition Model Five steps Step 1: Identify the Contract With the Customer Overview Assessing Whether Contracts Are Within the Scope of the Standard Enforceable rights and obligations The five contract criteria Collectibility Threshold Assessing collectibility Contract Recognition Arrangements Where Contract Criteria Are Not Met Reassessment The Portfolio Approach and Combining Contracts A practical expedient Combination of contracts required Assessing collectability of a portfolio of contracts Identifying the Customer Collaborative arrangements Arrangements with multiple parties Step 2: Identifying the Performance Obligations Overview Promises in Contracts with Customers Implicit promises Goods to be provided in the future Activities not included as performance obligations What is a promised good or service? Shipping and handling services Determining Whether a Good or Service Is Distinct Criterion 1: Good or service is capable of being distinct Criterion 2: Distinct within the context of the contract Promised good or service is not distinct Series of Distinct Goods or Services That Are Substantially the Same and Have the Same Pattern of Transfer The series provision Step 3: Determine the Transaction Price Overview Significant Financing Component Determining whether there is a financing component Significant financing component-contra indicative factors Determining the discount rate for a significant financing component Presentation of a significant financing component Variable Consideration Types and sources of variable consideration Determining if variable consideration exists Estimating total variable consideration Refund liability Constraining estimates of variable consideration Reassessing the transaction price for variable consideration Sales-based or usage-based royalty exception to variable constraint guidance Noncash Consideration Consideration Payable to the Customer Measurement Recognition Step 4: Allocate the Transaction Price Overview Determining Standalone Selling Price Standalone selling price directly observable Estimating a standalone selling price that is not directly observable The residual approach Combination of methods Allocating the Transaction Price Allocation of a discount Allocation of variable consideration Recognition Changes in the Transaction Price Change in transaction price not related to modification Subsequent information related to variable consideration Step 5: Recognize Revenue When (Or As) the Entity Satisfies a Performance Obligation Overview Control of an Asset Direct the use of an asset Benefits of the asset Other considerations Performance Obligations Satisfied Over Time Criterion 1-Customer simultaneously receives and consumes the benefit as the entity performs Criterion 2-Entity's performance creates an asset that the customer controls as the asset is created or enhanced Criterion 3-Entity's performance does not create an alternative use, but entity has an enforceable right to payment for performance completed Performance Obligations Satisfied at a Point in Time Determining the point in time at which a performance obligation is satisfied Measuring Progress Toward Complete Satisfaction of a Performance Obligation Practical expedient Methods for measuring progress Inability to estimate progress Measuring progress toward satisfaction of a stand-ready obligation Determining the measure of progress for a combined performance obligation Other Issues Right of Return Warranties Overview Assessing the warranty Principal versus Agent Overview Customer Options to Purchase Additional Goods or Services Assessing whether the customer has a material right Recognition Practical alternative Customer's Unexercised Rights (Breakage) Recognition Unclaimed property (escheat) laws Nonrefundable Upfront Fees Overview Recognition Practical alternative Set-up costs Renewal options Licenses Sale of intellectual property Licenses of intellectual property Assessing whether a license is distinct Nature of the entity's promise Sales- or usage-based royalties Recognition Repurchase Agreements A forward or call option Recognition Put options Consignment Arrangements Bill-and-Hold Arrangements Contract Modifications Approval Recognition Contract modification represents a separate contract Contract modification does not represent a separate contract Change in transaction price resulting from modification Disclosures Required by the Standard AICPA Industry Committees Changes to Industry-Specific Guidance ch41 41: ASC 610 Other Income Perspective and Issues Effective Date Technical Alert Effective date Transition Guidance Subtopic Scope and Scope Exceptions ASC 610-10, Overall ASC 610-20, Gains and Losses from the Derecognition of Financial Assets ASC 610-30, Gains and Losses on Involuntary Conversions Definitions of Terms Concepts, Rules, and Examples ASC 610-10, Overall ASC 610-20, Gains and Losses from the Derecognition of Financial Assets ASC 610-30, Gains and Losses on Involuntary Conversions Recognition, measurement, and presentation ch42 42: ASC 705 Cost of Sales And Services Perspective and Issues Technical Alert Subtopics Definitions of Terms Concepts, Rules, and Examples ASC 705-20, Accounting for Consideration Received from a Vendor ch43 43: ASC 710 Compensation-General Perspective and Issues Subtopics Scope and Scope Exceptions Definitions of Terms Concepts, Rules, and Examples Compensated Absences Vesting Sick pay Other types of paid time off Bonus Payments Deferred Compensation Contracts Example of a deferred compensation contract Lump-Sum Payments Under Union Contracts Deferred Compensation-Rabbi Trusts ch44 44: ASC 712 Compensation-Nonretirement Post-Employment Benefits Perspective and Issues Subtopic Overview Definitions of Terms Concepts, Rules, and Examples Initial Measurement and Recognition Subsequent Measurement Other Sources ch45 45: ASC 715 Compensation-Retirement Benefits Perspective and Issues Subtopics Scope and Scope Exceptions Technical Alert Guidance Effective date Transition Overview Definitions of Terms Concepts, Rules, and Examples ASC 715-20, Defined Benefits Plans-General ASC 715-30, Defined Benefit Plans-Pension Overview Objective Pension fund Pension benefit formula Benefit Obligations Example Assumptions Net Periodic Pension Cost Service costs Example Interest on the liability-the PBO Example Benefits paid Example Actual return on plan assets Example Gains and losses Example—gain or loss exceeds 10% corridor Amortization of unrecognized prior service cost Example of the years-of-service amortization method Example––amortization of unrecognized service cost Summary of net periodic pension cost Presentation and Disclosure Example—note disclosure Plan assets Employer's Liabilities and Assets under ASC 715-30 Example––reconciliation disclosure–– publicly held entities Statement of financial position presentation Nonpublic entity disclosures Example––disclosure of net funded amounts Example––amounts recognized in accumulated other comprehensive income Additional ASC 715-30 Guidance Reporting Funded Status-Other Issues Reporting when there are multiple plans Reporting benefit plan transactions and events in comprehensive income Example Reporting loans to participants by defined contribution pension plans Measurement date for year-end financial statements Measurement date for interim financial statements Disclosure Requirements Example—method one Example—method two Interim Financial Reporting Requirements Reporting and Disclosure by Not-for-Profit Entities Other Pension Considerations Annuity and insurance contracts Non-U.S. pension arrangements Business combinations Settlements and Curtailments of Plans Settlements Annuity contract settlements Example of a settlement Recognition of curtailments Example of a curtailment Termination benefits Example of termination benefits Component disposal ASC 715-60, Defined Benefits Plans-Other Postretirement Accounting for postretirement benefits Example Effect of the prescription drug benefit on OPEB computations Deferred Compensation Contracts ASC 715-70, Defined Contribution Plans ASC 715-80, Multiemployer Pension Plans ch46 46: ASC 718 Compensation-Stock Compensation Perspective and Issues Subtopics Scope and Scope Exceptions Technical Alert ASU 2016-09 Effective dates ASU 2017-09 Guidance Effective Dates Transition Overview Definitions of Terms Concepts, Rules, and Examples Accounting for Share-Based Payments Recognition principle Determining the grant date Classifying awards as liabilities or equity Performance and service conditions Initial Measurement Market conditions Valuation models Nonpublic entities-calculated or intrinsic value Nonpublic entity-practical expedient for intrinsic value Nonpublic entity-practical expedient for expected term Subsequent Measurement of Compensation Vesting Share options with performance conditions and/or market conditions Valuation for graded-vesting awards Modification of Awards Modifications of Awards of Equity Instruments Liability-to-equity modification Example of a liability-to-equity modification Example of an equity-to-liability modification Other modifications of share option awards Option fair value calculations Example—determining the fair value of options using the Black-Scholes-Mertonmodel Example—determining the fair value of options using the binomial/lattice model Example—multiperiod option valuation using binomial model Example—accounting for stock options for a publicly held entity Example—accounting for stock options for a nonpublic entity that is not an SEC registrant and elects the calculated value method Example—accounting for stock options for a nonpublic entity that is not an SEC registrant and elects the intrinsic value method Example of fair value accounting for stock options with cliff vesting—measurement and grant date the same Example of accounting for stock options with graded vesting—measurement and grant date the same Stock appreciation rights and similar instruments Example of accounting for SARs—sharebased liabilities Stock SARs Tandem plans Other ASC 718 Matters Other types of share-based compensation awards covered in ASC 718 Reload feature and reload option Example of reload options Effect of employer payroll taxes Payments in lieu of dividends on options Example of payments in lieu of dividends on options Disclosure requirements under ASC 718 ASC 718-40, Employee Stock Ownership Plans Example of accounting for ESOP transactions ASC 718-50, Employee Share Purchase Plans ASC 718-740, Income Taxes Other Sources ch47 47: ASC 720 Other Expenses Perspective and Issues Subtopics Technical Alert ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Guidance Effective date and transition Scope and Scope Exceptions ASC 720-15 ASC 720-25 ASC 720-35 Definitions of Terms Concepts, Rules, and Examples ASC 720-10, Overall ASC 720-15, Start-Up Costs ASC 720-20, Insurance Costs ASC 720-25, Contributions Made ASC 720-30, Real and Personal Property Taxes Example of accrued real estate taxes ASC 720-35, Advertising Costs ASC 720-40, Electronic Equipment Waste Obligations ASC 720-45, Business and Technology Reengineering ASC 720-50, Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers ch48 48: ASC 730 Research and Development Perspective and Issues Subtopics Scope and Scope Exception Overview Definitions of Terms Concepts, Rules, and Examples ASC 730-10, Research and Development-Overall Example of research and development ASC 730-20, Research and Development Arrangements Nonrefundable advance payments related to future RandD activities ch49 49: ASC 740 Income Taxes Perspective and Issues Subtopics Scope and Scope Exceptions Technical Alert ASU 2015-17 ASU 2016-16 Overview Definitions of Terms Concepts, Rules, and Examples Accounting Theory Simplified example of interperiod income tax allocation using the liability method Temporary Differences Temporary differences from share-based compensation arrangements Temporary differences arising from convertible debt with a beneficial conversion feature Other common temporary differences Permanent Differences Treatment of Net Operating Loss Carryforwards Example—net operating loss carryforwards and income tax credit carryforwards Measurement of Deferred Income Tax Assets and Liabilities Scheduling of the reversal years of temporary differences Determining the appropriate income tax rate Computing deferred income taxes Computation of deferred income tax liability and asset—basic example The Valuation Allowance for Deferred Income Tax Assets Expected to Be Unrealizable Establishment of a valuation allowance Example of applying the more-likely-than-not criterion to a deferred income tax asset Impact of a qualifying tax strategy Accounting for Uncertainty in Income Taxes Background Initial recognition and measurement Example of the two-step initial recognition and measurement process Interest Penalties Subsequent recognition, derecognition, and measurement Classification Applicability to business combinations The Effect of Tax Law Changes on Previously Recorded Deferred Income Tax Assets and Liabilities General rules Enactment occurring during an interim period Changes in a valuation allowance for an acquired entity's deferred income tax asset Leveraged leases Reporting the Effect of Tax Status Changes Reporting the Effect of Accounting Changes for Income Tax Purposes Example of adjustment for prospective catch-up adjustment due to change in tax accounting Income Tax Effects of Dividends Paid on Shares Held by Employee Stock Ownership Plans Deferred Income Tax Effects of Changes in the Fair Value of Debt and Marketable Equity Securities Example of deferred income taxes on investments in debt and marketable equity securities Other guidance on accounting for investments Tax Allocation for Business Investments Undistributed earnings of a subsidiary Undistributed earnings of an investee Example of income tax effects from investee company Example of income tax effects from subsidiary Separate Financial Statements of Subsidiaries or Investees Push-down accounting Tax credits related to dividend payments Asset Acquisitions Intraperiod Income Tax Allocation Comprehensive example of the intraperiod income tax allocation process Classification in the Statement of Financial Position Presentation and disclosures Payment to retain fiscal year Accounting for Income Taxes in Interim Periods Basic rules Basic example of interim period accounting for income taxes Net operating losses in interim periods Example of interim-period valuation allowance adjustments due to revised judgment Example of recognizing net operating loss carryforward benefit as actual liabilities are incurred Example 1—NOL carryback Example 2—NOL carryback Income tax provision applicable to interim period nonoperating items Example 1—unusual or infrequent items Example 2—unusual or infrequent items Example—discontinued operations ch50 50: ASC 805 Business Combinations Perspective and Issues Subtopics Technical Alerts ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business Guidance in ASU 2017-01 Example—scenario 1 Example—scenario 2 Effective dates Transition Scope and Scope Exceptions Overview Techniques for structuring business combinations Definitions of Terms Concepts, Rules, and Examples Transactions and Events Accounted for as Business Combinations Qualifying as a Business Accounting for Business Combinations Under the Acquisition Method Step 1-Identify the acquirer Step 2-Determine the acquisition date Example of consideration of new information obtained during the measurement period Step 3-Identify assets and liabilities requiring separate accounting Example of settlement of preexisting contractual supplier relationship; contract unfavorable to acquirer Example of settlement of preexisting contractual supplier relationship; contract favorable to acquirer Step 4-Classify or designate identifiable assets acquired and liabilities assumed Step 5—Recognize and measure the identifiable tangible and intangible assets acquired and liabilities assumed Private company alternative for accounting for identifiable intangible assets in a business combination Operating leases Operating lease assets owned by an acquiree/lessor Assets with uncertain cash flows Assets the acquirer plans to idle or to use in a manner that is not their highest and best use Identifiable intangibles are recognized separately from goodwill Subsequent measurement Example of acquirer replacing acquiree awards without the obligation to do so Example of acquirer replacement awards requiring no postcombination services exchanges for fully vested acquiree awards where the employees have rendered all required services by the acquisition date Example of acquirer replacement awards requiring performance of postcombination services exchanged for acquiree awards for which all requisite services had been rendered by the acquiree’s employees as of the acquisition date Example of acquirer replacement awards requiring performance of postcombination services exchanged for acquiree awards with remaining unsatisfied requisite service period as of the acquisition date Example of acquirer replacement awards that do not require postcombination services exchanged for acquiree awards for which the acquiree’s employees had not yet completed all of the requisite services by the acquisition date Step 6-Recognize and measure any noncontrolling interest in the acquire Example of fair value of noncontrolling interest adjusted for noncontrolling interest discount Step 7-Measure the consideration transferred Step 8-Recognize and measure goodwill or gain on a bargain purchase Business combinations achieved in stages (step acquisitions) Example of a step acquisition ASC 805-40, Reverse Acquisitions Introduction Structure of the transaction Continuation of the business of the legal acquire Equity structure adjustments Consolidation procedures ASC 805-50, Related Issues-Pushdown Accounting Applying Pushdown Accounting Example of pushdown accounting