USA Is creating a holding company a business combination?

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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

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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.
 

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