US GAAP does not provide guidance on preparing carve-out financial statements. Certain SEC staff guidance addresses specific elements of carve-out financial statements. Additionally, while the SEC guidance is applicable only to public entities, it is often analogized to when preparing carve-out financial statements for non-public entities. SEC guidance applicable to the preparation of carve-out financial statements includes:
  • SEC FRM 2065, Acquisition of Selected Parts of an Entity may Result in Less than Full Financial Statements
  • SAB Topic 1.B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity
  • SAB Topic 5.Z.7, Accounting for the spin-off of a subsidiary, codified as ASC 505-60-S99-1.

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