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Accounting Standards, ASC

U.S. GAAP Codification of Accounting Standards
Codification Topic 325-20: Cost Method Investments

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Codification Topic 325-20
Cost Method Investments

Investments in equity securities

1. If fair value is readily determinable
--> Apply ASC 320 Investments - Debt and Equity Securities
--> SFAS 115

2. If fair value is not readily determinable and
--> Less than 20% of voting rights
--> Apply ASC 325-20 Cost Method Investments

Initial measurement
Investments are measured --> at cost

Subsequent measurement

1. Dividends from an investee
--> recognized as earnings from investment

2. Dividends over the accumulated earnings of an investee
--> return of investment, not earnings from investment

Impairment
A decrease in investment is recognized
--> if the decrease is "other than temporary"

International Financial Reporting Standards (IFRS)

IAS 39: Financial instruments: recognition and measurement

Codification Topic 325
Investments-Other

Subtopics of Codification Topic 325

   325-10 Overall
   325-20 Cost method investments
   325-30 Investments in insurance contracts
   325-40 Beneficial interests in securitized financial assets

Accounting Terms of Codification Topic 325-10

Accounting Terms of Codification Topic 325-20

Publicly traded company

Accounting Terms of Codification Topic 325-30

   Cash surrender value
   Certificates
   Claims stabilization reserve
   Deferred acquisition cost tax
   Insurance policy
   Life settlement contract
   Policy account balance
   Probable
   Surrender charge

Accounting Terms of Codification Topic 325-40

Beneficial interest
Debt security