The accounting for business combinations just got a little simpler. The Financial Accounting Standards Board has approved a change that will make it easier for companies to make adjustments to provisional amounts recorded in financial statements as a result of a merger or acquisition.

Under current rules, FASB says, an acquiring company is required to retrospectively adjust provisional amounts recorded in financial statements as of the acquisition date with a corresponding adjustment to goodwill. Such adjustments are required when an entity learns new information after the acquisition date that might have affected the provisional recorded amounts related to the acquired business unit. FASB looked for a way to make the accounting easier under its simplification initiative.

FASB’s Accounting Standards Update No. 2015-16 says entities will no longer be required to make retrospective adjustments to historical information as if the facts of the acquired unit had been known from the date of the acquisition. Instead, the acquiring company will recognize adjustments to provisional amounts in the period they are identified, showing any effects on earnings of any changes in depreciation, amortization or other items that affect income. Entities will be required to present separately on the face of the income statement or disclose in footnotes the portion of the amount recorded in current-period earnings that would have looked differently if the accounting had been determined from the acquisition date.

FASB says it took up the accounting change under its simplification initiative because stakeholders agreed that the existing accounting was complicated and unnecessary to provide investors with the information they need. FASB says the new accounting should be easier because it will not require companies to make retrospective adjustments to prior periods, sometimes more than one.

The incremental disclosures of the adjustment to prior periods seems adequate to give investors the information they need without undue accounting strife, the board said. “The board does not expect the amendments to significantly reduce the relevance of the information provided for provisional amounts recognized in a business combination because the effects of changes to provisional amounts will be highlighted in the income statement or note disclosures,” FASB wrote on its explanation of the new standard.

The new provisions take effect for public companies for annual periods beginning after Dec. 15, 2015, as well as interim periods within the first affected annual period.