Completing their first major joint project, the Financial Accounting Standards Board and the International Accounting Standards Board have agreed on two new standards on accounting for business combinations.FASB member G. Michael Crooch termed the new guidance “a significant convergence milestone [that] improves reporting while eliminating differences” between the standards that were previously promulgated by the two boards.

FASB’s Statement 141, Business Combinations, completes the second phase of the project that resulted in the original Statement 141, which was issued in June of 2001. That statement settled certain broad issues, such as the use of the purchase method of reporting on mergers and acquisitions, the amortization of goodwill, and the treatment of intangible assets.

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