From Neikirk, Mahoney & Smith, the FASB is proposing clarifications to the definition of the business. This proposal is not because the FASB believes that the current definition is too narrow, but rather that it is too broad. They are concerned that this broad definition can lead to transactions being reported as acquisitions or disposals of businesses rather than assets.
"Clarifying the Definition of a Business, would require that under FASB’s definition, a business would include at least an input and a substantive process that together contribute to the ability to create outputs and would remove the evaluation of whether a market participant could replace any missing element."
You can check out the full article at the Journal of Accountancy.
You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.
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