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Abstract
SFAS 164, Not-for-Profit Entities: Mergers and Acquisitions, provides guidance on accounting for a combination of NFP entities. To qualify as a new entity (i.e., an acquisition), the combined entity must have a newly formed governing body. SFAS 164 requires that different accounting methods apply to a merger of NFP entity and an acquisition by a NFP entity. The carryover method is required by SFAS 164 for NFP mergers. It specifies minimum disclosures to be made as of the merger date to enable users of the new entity's financial statements to evaluate the nature and financial effects of the merger that resulted in the formation of the new entity. The acquisition method in SFAS 164 is the same as the acquisition method described in SFAS 141R for business entities. SFAS 164 also addresses recognizing and measuring identifiable assets, liabilities, and noncontrolling interest. The standard requires an acquirer that expects the operations of the acquiree as part of the combined entity to be predominantly supported by contributions and returns on investments to recognize as a separate charge in its statement of activities the amount that would otherwise be recognized as goodwill at the acquisition date.