On January 5, 2017, the FASB issued Accounting Standards Update 2017-01, which revises the definition of a business.
The changes to the definition of a business will likely result in more acquisitions being accounted for as asset acquisitions across most industries, particularly real estate and pharmaceuticals. The definition of a business also affects many other areas of accounting including disposals, consolidation, and segment changes.
The FASB recently updated the definition of a business, but this is more than just an update to the codification glossary. It raises the bar on what qualifies as a business and may have a pervasive impact on accounting for acquisitions, dispositions, and even consolidations. Watch John McKeever discuss the three key areas of change.
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