7.13 Disclosures Related to Business Combinations That Occurred in Previous Reporting Periods

ASC 805-10-50-1 states, in part, that the “acquirer shall disclose information that enables users of its financial statements to evaluate the nature and financial effect of a business combination that occurs [during] the current [financial] reporting period.” Therefore, whenever financial statements include the period in which a business combination occurred, the required disclosures for the acquisition should be provided. For example, if an entity completed a business combination in 20X0 and presents three years of income statements in its financial statements, it should include the disclosures related to the 20X0 business combination in its 20X1 and 20X2 financial statements.