![]() ![]() Transfers and servicing of financial assetsĭirectly identifiable costs include the following: Revenue from contracts with customers (ASC 606) Loans and investments (post ASU 2016-13 and ASC 326) Investments in debt and equity securities (pre ASU 2016-13) Insurance contracts for insurance entities (pre ASU 2018-12) Insurance contracts for insurance entities (post ASU 2018-12) IFRS and US GAAP: Similarities and differences The deductibility of these costs is affected by the structure of the deal, safe harbor laws and many other factors.įinally, if material, the buyer must disclose the nature and amounts of transaction costs, as well as the income statement line items in which the costs are recognized.Ĭontact Ashton or your trusted BKD advisor for specific consultation on your facts and circumstances or other assistance with this topic.Business combinations and noncontrolling interestsĮquity method investments and joint ventures Next, the parties should be aware of the tax ramifications of transaction expenses. If the seller pays certain costs incurred for the buyer’s benefit, these costs should be expensed by the buyer in the period incurred (not as an increase to purchase price).Instead, these costs are treated as consideration paid to the seller (which is included in purchase price). If the buyer pays certain costs incurred for the seller’s benefit, these costs should not be expensed or capitalized.In this scenario, the buyer benefits from these costs and should record the expense on its books with a corresponding credit to equity. ![]()
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