Business Combinations: Accounting and Tax Reporting Responsibilities, ASC 805 and ASC 740 Guidelines

This webinar will guide tax and accounting professionals through the accounting and tax complexities of business combinations. Our panel of knowledgeable M&A experts will review ASC 805 and ASC 740 requirements as they relate to mergers and acquisitions and offer suggestions to simplify the relative financial and tax reporting responsibilities.

Business combinations create complex tax and accounting reporting issues. Updated in 2021, ASC 805, Business Combinations, provides guidelines for recording these transactions. A combination could be taxable or nontaxable. Asset acquisitions, for example, can generate taxable income and goodwill. Even though a stock acquisition may be nontaxable, the acquirer must record the assets received at their fair value. The tax basis of these assets, however, is carried over, creating discrepancies between GAAP and tax values. 

Perhaps the most formidable aspect of these combinations is the determination of deferred taxes and relative valuation allowances under ASC 740. Most notably, differences in book/tax values create recognition timing differences for book/tax purposes. Acquired carryforwards and uncertain tax positions further complicate these calculations. Tax professionals working with companies considering mergers or acquisitions must understand the intricacies of the tax reporting responsibilities associated with these transactions. 

Listen as our panel of corporate tax professionals points out the key financial and tax reporting issues encountered by businesses and their accountants when companies combine.