Effectus Group comments on FASB’s Proposed Accounting Standards Update – Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement
In our comment letter, we support the Board’s efforts to provide a framework for accounting for joint venture formations but do not support requiring that a joint venture recognize and initially measure its assets and liabilities upon formation at fair value using purchase accounting. In the event the FASB proceeds with the proposed accounting standards update, we also offer observations that we believe are necessary to improve the operability, consistency and understandability of the guidance.
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