A.15 Disclosures
ASC 805-50
50-5 If an acquiree elects the option to apply pushdown accounting in its separate financial statements, it shall disclose information in the period in which the pushdown accounting was applied (or in the current reporting period if the acquiree recognizes adjustments that relate to pushdown accounting) that enables users of financial statements to evaluate the effect of pushdown accounting. To meet this disclosure objective, the acquiree shall consider the disclosure requirements in other Subtopics of Topic 805.
50-6 Information to evaluate the effect of pushdown accounting may include the following:
- The name and a description of the acquirer and a description of how the acquirer obtained control of the acquiree.
- The acquisition date.
- The acquisition-date fair value of the total consideration transferred by the acquirer.
- The amounts recognized by the acquiree as of the acquisition date for each major class of assets and liabilities as a result of applying pushdown accounting. If the initial accounting for pushdown accounting is incomplete for any amounts recognized by the acquiree, the reasons why the initial accounting is incomplete.
- A qualitative description of the factors that make up the goodwill recognized, such as expected synergies from combining operations of the acquiree and the acquirer, or intangible assets that do not qualify for separate recognition, or other factors. In a bargain purchase (see paragraphs 805-30-25-2 through 25-4), the amount of the bargain purchase recognized in additional paid-in capital (or net assets of a not-for-profit acquiree) and a description of the reasons why the transaction resulted in a gain.
- Information to evaluate the financial effects of adjustments recognized in the current reporting period that relate to pushdown accounting that occurred in the current or previous reporting periods (including those adjustments made as a result of the initial accounting for pushdown accounting being incomplete [see paragraphs 805-10-25-13 through 25-14]).
The information in this paragraph is not an exhaustive list of disclosure requirements. The acquiree shall disclose whatever additional information is necessary to meet the disclosure objective set out in paragraph 805-50-50-5.
The disclosures that an entity applying pushdown accounting is required to provide under ASC 805-50
are generally based on the disclosures that an acquirer is required to provide for a business
combination under ASC 805-10, ASC 805-20, and ASC 805-30. However, the ASC 805-50 requirements
exclude certain disclosures that would only be relevant to users of the acquirer’s consolidated financial
statements. For example, an acquiree is not required to disclose items such as the percentage of voting
equity interests acquired by the acquirer, any transactions the acquirer recognized separately from the
acquisition, and supplemental pro forma information. In subsequent reporting periods, the acquiree
would need to provide any required disclosures for items such as goodwill and intangible assets.
There are no disclosure requirements for an acquiree that does not elect to apply pushdown
accounting. Therefore, an acquiree would not be required to disclose that it was acquired or that it
elected not to apply pushdown accounting.