One model here has no real equivalent anywhere else
Purchase price allocation under ASC 805 will look familiar to an IFRS 3 reporter, and goodwill under ASC 350 behaves quite differently once a private company election is available. The genuinely unfamiliar part is ASC 810's variable interest entity model, which decides consolidation by reference to economic exposure rather than to voting control, and which has no direct counterpart in IFRS or Ind AS. Groups with joint ventures, special purpose vehicles or common control arrangements can find that the US answer to what consolidates is simply a different answer.
- Purchase price allocation, and the intangibles that appear on acquisition
- The variable interest entity model, and why it is not IFRS 10 with different words
- Goodwill impairment, and the private company election that changes the profile entirely
Business combinations: recognisable, with different edges
The acquisition method applies: identify the acquirer, determine the acquisition date, recognise and measure the identifiable assets acquired and liabilities assumed at fair value, and recognise goodwill as the residual. The structure matches IFRS 3, and so does most of the practical work.
Areas where the detail diverges, and which are worth checking on any conversion or any transaction, include the measurement of non-controlling interests, the treatment of contingent consideration classified as a liability, the recognition of contingencies acquired, and the definition of a business itself, which determines whether the acquisition method applies at all or whether the transaction is an asset acquisition accounted for quite differently.
A recent change worth noting. An Update issued in May 2025 addressed determining the accounting acquirer in the acquisition of a variable interest entity, amending both ASC 805 and ASC 810, and applies to annual periods beginning after 15 December 2026. It matters directly to reverse merger and holding company structures, which is exactly the population of India-founded businesses with a US parent above them.
The variable interest entity model
US GAAP asks two questions in sequence. First, is the entity a variable interest entity, broadly one whose equity holders lack the characteristics of a controlling financial interest or whose equity is insufficient to fund its activities without further support. If it is, consolidation follows economic exposure rather than votes: the primary beneficiary consolidates, being the party with power to direct the activities that most significantly affect economic performance and with the obligation to absorb losses or the right to receive benefits that could be significant.
Why it is not IFRS 10 with different words
IFRS 10 applies one control model to everything, with the assessment adapted where voting rights are not the dominant factor. US GAAP applies a separate model with its own scope test. The two frequently reach the same answer and sometimes do not, and where they do not, the group's consolidation perimeter is different under the two frameworks. That is a structural reconciling item, not an adjustment.
Where Indian groups meet it
Infrastructure and real estate special purpose vehicles, securitisation structures, joint ventures with disproportionate funding arrangements, and common control arrangements between entities owned by the same promoter family. The last of these is very common in Indian groups and is precisely the fact pattern the private company alternative on common control leasing arrangements was written for.
Goodwill: two quite different lives
Public business entity
Goodwill is not amortised. It is tested for impairment at the reporting unit level, and the definition of a reporting unit does most of the work in determining whether an impairment ever arises: goodwill sitting in a large, well-performing reporting unit is effectively shielded by the other businesses in it.
Private company election
A private company may elect to amortise goodwill on a straight-line basis and to test only when a triggering event occurs. This produces a predictable charge instead of an unpredictable risk, and it is one of the more consequential elections available in US GAAP. The period is up to ten years straight-line: ten may be used without justification, a shorter life where one can be demonstrated, never longer. The election is open to entities that are not public business entities and to not-for-profits, and it is all-or-nothing, applying to all existing and future goodwill, with the amortisation and the impairment simplification taken together. It also covers goodwill inside an equity method investment, which is then not separately tested.
A live FASB project is often misreported as reviving amortisation for public companies. It does not. The project added in mid-2026 is directed at the level at which goodwill is tested, with the direction of travel being from the reporting unit towards the operating segment, and at whether the annual test should remain mandatory. Extending amortisation to public companies was considered and not pursued. Nothing in the standard has changed yet.
The election has to be unwound on registering with the SEC. A company that has amortised goodwill under the private company alternative and then becomes a public business entity has to reflect the public company treatment in the financial statements included in its registration statement. Plan the election with that in mind if a listing is a realistic possibility, rather than treating it purely as a current reporting simplification.
Where this sits
US GAAP Advisory
The overview page, with every guide listed and the situations each one answers.
US GAAP for Indian Subsidiaries of US Parents
Guide 1. The reporting pack, the close calendar, materiality set by the parent, and who actually owns the bridge.
Converting to US GAAP
Guide 2. Where US GAAP and Ind AS or IFRS genuinely part company, and what that does to the numbers.
Revenue, Leases and Stock Compensation
Guide 3. ASC 606, ASC 842 and ASC 718, the three topics an Indian subsidiary meets first.
US Listing Readiness
Guide 5, in preparation. Foreign private issuer status, filer categories, internal control over financial reporting, and what the SEC has proposed to change.
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If your group has special purpose vehicles, common control arrangements, or a holding structure created for an investor, the US consolidation answer is worth establishing before it appears in someone else's diligence report. A partner replies within one business day.
This page is general information, not professional advice. US GAAP, the rules of the Securities and Exchange Commission, and the Indian law that sits alongside them all change frequently, and several of the United States positions described on these pages were at proposal stage rather than settled when this page was written. The Income-tax Act 2025 replaced the 1961 Act with effect from 1 April 2026. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.