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FASB Plans to Amend New Business Combination Rules

Tammy Whitehouse | October 30, 2008

The Financial Accounting Standards Board is bowing to outcry from preparers and attorneys that accounting requirements around pending legal actions in business combinations are unworkable.

In its regular weekly meeting Oct. 29, the board determined it will publish a staff position to amend Financial Accounting Statement No. 141R, Business Combinations. The amendment will try to sort out the collision that is occurring with the controversial new standard on business combinations, the highly controversial requirements around measuring fair value, and the continued quest to make U.S. rules more like international rules even when the U.S. has a far different legal system than most other countries.

When accounting for a merger or acquisition, FAS 141R requires that any contractual and non-contractual contingencies, or...

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