News Release 05_22_09


FASB Issues Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions

Norwalk, CT, May 22, 2009—The Financial Accounting Standards Board (FASB) today issued FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions. This Statement is effective for mergers occurring on or after December 15, 2009, and acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2009.

The Statement is intended to improve the relevance, representational faithfulness, and comparability of the information that a not-for-profit entity provides in its financial reports about a combination with one or more other not-for-profit entities, businesses, or nonprofit activities. To accomplish that, this Statement establishes principles and requirements for how a not-for-profit entity:

  • Determines whether a combination is a merger or an acquisition
  • Applies the carryover method in accounting for a merger
  • Applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer
  • Determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger or an acquisition.

It also is intended to improve the information a not-for-profit entity provides about goodwill and other intangible assets after an acquisition by amending FASB Statement No. 142, Goodwill and Other Intangible Assets, to make it fully applicable to not-for-profit entities.

“Statement 164 will provide important information to users of financial statements regarding not-for-profit organizations that have merged or acquired an entity,” states Jeffrey Mechanick, FASB project manager. “Input from users, received during our due process, was valuable to us in creating this guidance in an area of accounting that has needed greater clarification, helping to improve the quality of information provided to users of these financial reports.”

Statement 164 can be found online at

About the Financial Accounting Standards Board

Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at