AICPA seeks feedback on accounting and valuation guide

By Kevin Brewer

The AICPA's Financial Reporting Executive Committee (FinREC) issued a working draft of the AICPA Accounting and Valuation Guide, Business Combinations, which provides guidance and illustrations regarding the accounting and valuation considerations for business combination transactions.

FinREC is seeking comments on the proposed guidance, which addresses many accounting and valuation issues that have emerged over time and will help preparers, auditors, and valuation specialists understand and comply with the requirements of FASB ASC Topic 805, Business Combinations, and FASB ASC Topic 820, Fair Value Measurement.

The proposed guidance covers a number of topics, including identifying business combination transactions and whether the acquired set meets the definition of a business or is a collection of assets; identifying the acquirer; measuring the consideration transferred; recognizing and measuring the identifiable assets acquired and liabilities assumed, and any noncontrolling interests in the acquiree; as well as recognizing and measuring goodwill or a gain from a bargain purchase. It also addresses a number of valuation issues that have emerged over the years. Specifically, it:

  • Provides guidance for assessing prospective financial information, discount rate, and transaction operating value of the acquiree.
  • Addresses valuation approaches and methods as well as their application to a variety of assets acquired and liabilities assumed.
  • Discusses the valuation method selection process for acquired intangible assets and addresses why certain methods, particularly the inputs to those methods, are appropriate, given the circumstances.
  • Includes a number of illustrative examples demonstrating, among other things, the business enterprise value and internal rate of return analyses, the valuation method selection process, and the application of valuation methods most commonly used in practice to value a particular asset or liability.

Comments can be emailed to Yelena Mishkevich at The comment deadline is Jan. 15, 2023.

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at

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