Are you ready for FASB’s updated business definition?
Abstract: The FASB recently updated its definition of a “business” for accounting purposes. The changes are significant because the new rules will classify many common transactions currently treated as business combinations as, instead, asset acquisitions. This article summarizes the revised definition which goes into effect for annual periods beginning after December 15, 2017, including interim periods within those periods, although the rules permit early adoption. A short sidebar identifies the differences between business combinations and asset acquisitions.