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2017

FASB Clarifies the Definition of a Business (January 13, 2017)

Heads Up | Volume 24, Issue 3
January 13, 2017
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FASB Clarifies the Definition of a Business

On January 5, 2017, the FASB issued ASU 2017-011 to clarify the de?nition of a business in ASC 805.2 The FASB issued the ASU in response to stakeholder feedback that the de?nition of a business in ASC 805 is being applied too broadly. In addition, stakeholders said that analyzing transactions under the current definition is difficult and costly. Concerns about the de?nition of a business were among the primary issues raised in connection with the Financial Accounting Foundation’s post-implementation review report on FASB Statement No. 141(R), Business Combinations (codi?ed in ASC 805). The amendments in the ASU are intended to make application of the guidance more consistent and cost-ef?cient.

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