In December 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 141 (Revised) to implement a number of major modifications and additional refinements in how to account for business combinations. Among them is a new treatment of a relatively rare transaction, the "bargain purchase" of a controlled entity.

FASB's earnest (and overdue, we think) embrace of fair-value measurement principles dramatically changes how combinations will be accounted for going forward. Nowhere are the implications of this shift more evident than for these bargain situations.

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