The Financial Accounting Standards Board has issued a proposed accounting standards update on “pushdown accounting” from FASB’s Emerging Issues Task Force.
The update would be part of the business combination standards collected under Topic 805 of the FASB Accounting Standards Codification. Under current U.S. GAAP, there is limited guidance for determining whether and when a new accounting and reporting basis, referred to as “pushdown accounting,” should be established in an acquired entity’s separate financial statements. There has been some guidance for SEC-registered companies in an SEC Staff Accounting Bulletin and in comments made by an SEC observer at meetings of the Emerging Issues Task Force, but because the SEC staff’s guidance is generally applicable mostly to public companies, the EITF was concerned there might be different ways to apply pushdown accounting among entities that are not SEC registrants and even among the SEC registrants as well.
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