USA Is creating a holding company a business combination?

[Thedastardlyone]

Hello,

So my client is creating a holding company and contributing entities to that holding company. I am reading ASC 805 guidance and it seems like it does.

FASB definition: A transaction or other event in which an acquirer : obtains control of one or more businesses

There was no consideration given it just added a notch in the legal structure like this. Company A owns Company C. Company A creates Company B and Gives C to B. New structure: Company A owns Company B owns Company C.

Per ASC 805-10-55-2 and 3, no consideration is needed. However what I do not see specified is what happens when the acquirer and Acquiree are controlled by the same entity?

Any guidance if this kind of merger triggers business combination accounting and goodwill?

 

[kirby]

No goodwill. This just moves everything you own in Co C to Co B which you also own. Like moving something from one pocket to another pocket.