FASB ASC 810 Consolidation
FASB ASC Guide > FASB ASC 810
The Financial Accounting Standards Board (FASB) released Accounting Standards Codification 810 (ASC 810) to address matters related to consolidation of businesses on the financial statements. This would include such events as business combinations, for example companies that have separate financial statements prepared that need to be combined to reflect a legal entity. In this process, certain thing such as inter-company activity need to be eliminated in order to not gross up items like receivables or revenues. This is because transactions such as sales that a company has with itself are not recognizable until an external party, for example another company buying the goods, becomes involved.
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