Which scenario is NOT covered by FASB ASC 805?

FASB ASC 805 provides guidance primarily related to business combinations and the acquisition of businesses. When considering which scenario is not covered by ASC 805, it becomes clear that the acquisition of an asset that is not a business falls outside its scope.

This is because ASC 805 applies specifically to transactions involving the acquisition of a business, which is defined as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits. An asset acquisition, on the other hand, focuses on the purchase of individual assets or a group of assets that do not meet the criteria to be deemed a business, and therefore does not fall under the guidance provided in ASC 805.

Conversely, the other scenarios—formation of a joint venture, mergers between publicly traded companies, and combinations under common control—all involve business combinations and are covered under ASC 805. These situations involve a set of activities and identifiable assets that meet the criteria of operating as a business, thereby making them applicable under the FASB ASC 805 framework.