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U.S. GAAP Accounting Standards
Codification Topic 323-10:
Investments - Equity Method and Joint Ventures


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Codification Topic 323-10
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 


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


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   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
    

 




   Other Topics at the Codification 300 
Accounting Standards Codification, ASC, Overview
 
ASC Codification Topic 305: Cash and Cash Equivalents
 
ASC Codification Topic 310: Receivables
 
ASC Codification Topic 320: Investments-Debt and Equity Securities
ASC Codification Topic 323: Investments-Equity Method and Joint Ventures
ASC Codification Topic 325: Investments-Other
 
ASC Codification Topic 330: Inventory
 
ASC Codification Topic 340: Other Assets and Deferred Costs
 
ASC Codification Topic 350: Intangibles-Goodwill and Other
 
ASC Codification Topic 360: Property, Plant, and Equipment


   U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

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