The FASB has issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement, to address diversity in practice with respect to the initial measurement of joint ventures upon formation. The guidance will provide that the new organization use fair value (with certain exceptions) for the net assets contributed at formation. The standard is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with options for retrospective application.

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With over 15 years of experience in the accounting profession, Melisa Galasso designs and facilitates courses in advanced technical accounting and auditing topics, including not-for-profit and governmental accounting. She closely monitors regulatory bodies for changes in auditing and accounting guidance and serves as a subject matter expert in implementing the updated guidance.