Accounting Research Tool
Chapter 11 — Business Combinations

11.8 Asset Acquistions

11.8 Asset Acquisitions

As described in Section 11.1, an entity may acquire a group of assets that do not meet the definition of a business under ASC 805. Acquisitions of this nature are considered “asset acquisitions” and do not follow the measurement principles of a business combination under ASC 805. For financial reporting purposes, such transactions are generally recognized under a cost accumulation model. However, the tax bases of assets acquired could be different from the cost bases for a variety of reasons. As a result, temporary differences arise. The accounting for these differences differs from the accounting for a business combination described throughout this chapter. The primary difference is that no goodwill is recorded in an asset acquisition. Instead, the cost basis of an asset may be adjusted to account for recognition of deferred taxes.