FASB Issues Business Combinations Standard, FAS 141(R), and FAS 160

(Dec. 4, 2007) The FInancial Accounting Standards Board (FASB) issued FASB Statements No. 141, Business Combinations (Revised 2007) (FAS 141(R)) and No. 160, Noncontrolling Interests in Consolidated Financial Statements (FAS 160). Both are effective for fiscal years beginning after Dec. 15, 2008 (earlier adoption is prohibited).

 The press release is attached. FAS 141(R) applies to applies to all business entities, including mutual entities that previously used the pooling-of-interests method of accounting for some business combinations. A summary of FAS 141(R) is available here. 

FAS 160 applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. A summary of FAS 160 is available here.

Notably, the new standards represent the first major joint project that was a joint effort of FASB along with the International Accounting Standards Board (IASB), in their overall efforts to converge accounting standards worldwide to one set of global standards.