What is the definition of a business according to FASB ASC 805?

The definition of a business according to FASB ASC 805 is "an integrated set of activities and assets." This means that for something to qualify as a business, it must entail not just individual assets, but rather a combination of resources and processes that produce outputs.

In practical terms, this integrated set includes things like tangible assets (physical resources), intangible assets (like intellectual property), and other capabilities that come together to form the overall operation of the business. The integration of these activities and assets allows the business to provide a product or service in the marketplace, generating revenues and driving economic value.

This definition emphasizes the complexity and interrelated nature of what constitutes a business, distinguishing it from mere collections of resources or employees, which do not inherently possess the capability to operate as a standalone entity in the business environment.