Chapter 2 — Business Acquisitions | DART – Deloitte Accounting Research Tool

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2.1 Acquisition of a Business

2.1.1 Definition of a Business for SEC Reporting Purposes

2.1.2 Differences Between the Definition of a Business for SEC Reporting Purposes and U.S. GAAP Accounting Purposes

2.1.3 Disclosure Requirements for an Acquisition of Assets and Assumption of Liabilities That Does Not Meet the Definition of a Business for SEC Reporting Purposes

2.2 Identifying a Probable Business Acquisition

2.3 Measuring Significance

2.3.1 Financial Statements Used to Measure Significance

2.3.2 Investment Test

2.3.3 Asset Test

2.3.4 Income Test

2.3.5 Application of the Significance Tests in Special Circumstances

2.4 Acquiree Financial Statements Required in SEC Filings

2.4.1 Form 8-K

2.4.2 Registration Statements

2.4.3 Prospectus Supplements to Currently Effective Registration Statements

2.4.4 Form S-4 Registration Statements for Securities Issued for a Business Acquisition

2.4.5 Proxy Statements for a Business Acquisition

2.4.6 Financial Statement and Audit Requirements for Targets in SPAC Transactions

2.5 Age of Financial Statements

2.5.1 Considerations Related to the Age of an Acquiree’s Financial Statements

2.5.2 General Rules for Determining the Age of Financial Statements for the Acquiree

2.5.3 Age of Financial Statements in Form 8-K

2.5.4 Age of Financial Statements in Registration or Proxy Statements

2.5.5 Noncompliance With the Financial Statement Age Requirements

2.5.6 Other Considerations

2.6 Form and Content of Acquiree Financial Statements

2.6.1 Accounting Standards, Disclosures, and Adoption Dates

2.6.2 Accounting Requirements

2.6.3 Interim Financial Statements

2.6.4 Acquisition of a Portion of an Entity

2.7 Related Businesses

2.7.1 Definition of Related Businesses

2.7.2 Performing the Significance Tests for Related Businesses, and Other SEC Reporting Considerations

2.8 Acquisition of an Additional Equity Interest (Step Acquisition)

2.8.1 Performing the Significance Tests for a Step Acquisition

2.8.2 Financial Statement Requirements for a Step Acquisition

2.9 Individually Insignificant Acquisitions

2.9.1 Filings for Which the Financial Statements of Individually Insignificant Acquirees Are Required

2.9.2 Period Over Which a Registrant Must Evaluate Individually Insignificant Acquirees

2.9.3 Financial Statements Used to Measure Significance for Individually Insignificant Acquirees

2.9.4 Performing the Tests of Significance for Individually Insignificant Acquirees

2.10 Joint Ventures

2.10.1 Disposition of a Business — Registrant Contributes a Business in Exchange for Its Interest in a Newly Formed Joint Venture

2.10.2 Disposition of Assets — Registrant Contributes Assets in Exchange for Its Interest in a Newly Formed Joint Venture

2.10.3 Acquisition — Registrant Acquires an Interest in a Newly Formed Joint Venture

2.10.4 Performing the Significance Tests for an Acquired or to Be Acquired Interest in a Newly Formed Joint Venture

2.11 Acquisition or Probable Acquisition of a Foreign Business

2.11.1 Use of U.S. GAAP in the Performance of the Significance Tests Under Rule 3-05

2.11.2 Auditing Standards for the Financial Statements of a Foreign Acquiree

2.11.3 Accounting Principles for the Financial Statements of a Foreign Acquiree

2.11.4 Reconciliation to U.S. GAAP May Be Required

2.11.5 Financial Statement Periods to Be Presented for Foreign Business Acquirees

2.12 IPO/Initial Registration Statements

2.12.1 Grace Period

2.12.2 Aggregate

2.12.3 Financial Statements Used to Measure Significance

2.12.4 Periods of Preacquisition Financial Statements Required

2.12.5 Omitting a Balance Sheet for a Significant Business Acquisition

2.12.6 Omitting Financial Statements of Acquired Entities From Draft Registration Statements

2.12.7 Waiver Requests Under Rule 3-13

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This SEC Reporting Interpretations manual provides comprehensive guidance; however, the manual does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.