For financial reasons, two not-for-profit hospice organizations (hospices A and B) decided to combine. As a result of the combination, the assets and liabilities of the combined hospice were reported at the amounts that had been previously reported by A and B on their financial statements. Under the FASB, the combining of hospices A and B would be classified as which of the following?

Question

Quizplus · Accepted Answer

The combination described is classified as a merger under FASB standards because it involves two not-for-profit entities combining their assets and liabilities at their previously reported amounts, without one entity acquiring the other.

For Financial Reasons, Two Not-For-Profit Hospice Organizations (Hospices a and B)