Statement 141 provides that the term business combination excludes transfers of net assets or exchanges of equity interests between entities under common control. Paragraph D12 of Statement 141 further provides that, in those situations, related assets and liabilities are to be recorded at their carrying amounts at the date of transfer. Neither Opinion 16 nor Statement 141 defines the term common control. 2. Questions exist with respect to whether separate entities are under common control when common majority ownership exists by an individual, a family, or a group affiliated in some other manner. For example, some suggest that the accounting should presume that immediate family members will vote their shares in concert absent evidence to the contrary. If that presumption is appropriate, an additional issue is how to define Copyright © 2008, Financial Accounting Standards Board Not for redistribution Page 1“immediate family member. ” Further, some question whether companies owned by individuals that are not members of an immediate family could ever be under common control
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