B.5 Disclosures
B.5.1 Disclosures by the Receiving Entity
ASC 805-50
50-3 The notes to financial statements of the receiving entity shall disclose the following for the period in which the transfer of assets and liabilities or exchange of equity interests occurred:
- The name and brief description of the entity included in the reporting entity as a result of the net asset transfer or exchange of equity interests
- The method of accounting for the transfer of net assets or exchange of equity interests.
50-4 The receiving entity also shall consider whether additional disclosures are required in accordance with Section 850-10-50, which provides guidance on related party transactions and certain common control relationships.
In addition to the disclosures required by ASC 805-50-50-3 and ASC 850-10-50, if the net assets
transferred result in a change in the reporting entity (see Section B.4.1), the receiving entity must
provide the disclosures required by ASC 250-10-50-6, which states, in part:
When there has been a change in the reporting entity, the financial statements of the period of the change shall
describe the nature of the change and the reason for it. In addition, the effect of the change on income from
continuing operations, net income (or other appropriate captions of changes in the applicable net assets or
performance indicator), other comprehensive income, and any related per-share amounts shall be disclosed
for all periods presented. Financial statements of subsequent periods need not repeat the disclosures required
by this paragraph. If a change in reporting entity does not have a material effect in the period of change but is
reasonably certain to have a material effect in later periods, the nature of and reason for the change shall be
disclosed whenever the financial statements of the period of change are presented.
B.5.1.1 Earnings per Share
ASC 805-50
50-2 The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated under the guidance in paragraph 805-50-45-3 but shall be disclosed.
If the receiving entity is required to disclose EPS in its separate financial
statements and presents the common-control transfer as a change in the
reporting entity (see Section B.4.1), earnings-per-share amounts must be recast to
include the earnings (or losses) of the transferred net assets.
B.5.2 Disclosures by the Transferring Entity
ASC 805-50-50 does not include any specific disclosure requirements for the transferring entity. If
the transferring entity accounts for the transferred net assets as a disposal, it should provide the
disclosures required by ASC 360-10-50 for long-lived assets that are disposed of. If the disposal qualifies
for presentation as a discontinued operation from the perspective of the transferring entity, it should
provide the disclosures required by ASC 205-20-50 in its separate financial statements. In addition,
we believe that the transferring entity should provide disclosures sufficient for users of its separate
financial statements to understand the nature of and accounting for the transfer (to the extent that such
disclosures are not required by other GAAP). We believe that the transferring entity should analogize
to the disclosure requirements for the receiving entity in ASC 805-50-50-3, ASC 850-10-50, and
ASC 250-10-50-6.