U.S. GAAP, Codification of Accounting Standards, ASC - Accounting Standards Codification by FASB

U.S. GAAP Codification of Accounting Standards

U.S. GAAP Codification of Accounting Standards
Codification Topic 323:
Investments - Equity Method and Joint Ventures

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Codification Topic 323
Investments - Equity Method and Joint Ventures

Investments in Equity of Other Entities

1. Investments in equity securities that have (A)
(A) readily determinable fair value
--> Apply asc topic 320: Investments - Debt and Equity Securities
--> SFAS 115

2. Investments in common stock of subsidiaries
--> Apply asc topic 810: Consolidation
--> ARB 51, SFAS 160

3. Investments in common stock with significant influence
--> Apply asc topic 323-10: Investments - Equity Method and Joint Ventures
--> APB 18

4. Investments in partnerships, unincorporated joint ventures, limited liability companies
--> Apply asc topic 323-30: Partnerships, Joint Ventures, Limited Liability Entities
--> AICPA Accounting Interpretation (AIN) APB 18

5. Investments in common stock other than previous cases
--> Apply asc topic 325-20: Cost Method Investments
--> APB 18

6. Fair value option
--> ASC 825 Financial Instruments: Fair Value Option (FVO)
--> SFAS 159: FVO for financial assets and financial liabilities, ASC 825
--> SFAS 156: FVO for servicing assets and servicing liabilities, ASC 860
--> SFAS 155: FVO for hybrid instruments, ASC 815
--> SFAS 157: Fair Value Measurements, ASC 820
--> SFAS 107: Disclosures about Fair Value of Financial Instruments, ASC 820

Significant Influence
--> 20% or more of the voting rights of an investee
--> Investee is not a subsidiary or a controlled entity

Initial measurement under equity method
--> investments are measured at cost

Subsequent measurement under equity method

1. Investor's share of (B)
--> is recognized in the investor's financial statements
(B) Earnings or losses of an investee

2. Investor's share of (C)
--> adjusts the investor's other comprehensive income
(C) Other comprehensive income

3. Investor's share of (B) and (C)
--> adjusts the carrying amount of the investor's investment

Equity method losses

Investor's share of losses of an investee
--> is recognized up to
--> the carrying amount of the investor's investment

Equity method goodwill: Basis difference

1. If investment cost > investor's share of net assets
--> the difference between two
--> is recognized as "equity method goodwill"

2. Equity method goodwill is not amortized.

3. Impairment test for goodwill, SFAS 142,
--> is not applied to "equity method goodwill"

4. Equity method goodwill is impaired
--> if a decrease in value is "other than temporary"

Impairment of equity method investment
If a decrease in (D) is "other than temporary"
--> recognize such a decrease
--> beyond the amount normally recognized by equity method, i.e., current losses
(D) the value of investor's equity method investment

Codification Topic 323-30: Partnerships, Joint Ventures, Limited Liability Entities

International Financial Reporting Standards (IFRS)
IAS 28: Investments in Associates

Codification Topic 323
Investments-Equity Method and Joint Ventures

Subtopics of Codification Topic 323

323-10 Overall
323-30 Partnerships, Joint Ventures, and Limited Liability Entities

Accounting Terms of Codification Topic 323-10

   Common stock
   Corporate joint venture
   Dividends
   Earnings or losses of an investee
   In-substance common stock
   Investee
   Investor
   Noncontrolling interest
   Parent
   Significant influence
   Standstill agreement
   Subsidiary

Accounting Terms of Codification Topic 323-30