Equity Method Investments (Portfolio 5130)

Description

Bloomberg Tax Accounting Policy and Practice Portfolio 5130, Equity Method Investments, explains and analyzes the rules and best practices for accounting for investments using the equity method. The Portfolio includes extensive discussion and examples of the application of the guidance in FASB Accounting Standards Codification (ASC) 323, Investments – Equity Method and Joint Ventures.

The Portfolio covers accounting for investments in non-consolidated corporations, as well as investments in non-corporate, non-controlled entities, including real estate ventures. The Portfolio discusses how to determine whether the equity method applies to a particular investment in a particular form of entity, including a detailed analysis of how to determine whether “significant influence” exists and how to analyze equity instruments to determine whether they qualify as in-substance common stock. Also included is a detailed explanation of how to apply the equity method to a particular investment as well as a detailed explanation of the disclosure and presentation requirements (including sample disclosures and SEC Comment Letters). The Portfolio includes analysis of the international accounting standards applicable to accounting for equity investments and analyzes the differences between the international accounting standards and U.S. GAAP. In addition to its discussion of the equity method, the Portfolio also includes a general overview of the cost method of accounting for investments.

This Portfolio may be cited as Bloomberg Tax and Accounting Portfolio 5130, Starczewski, Equity Method Investments (Accounting Policy and Practice Series).

Table of Contents

I. Introduction & Scope of Portfolio
II. Determining Whether the Equity Method Applies to An Investment
III. Applying the Equity Method
IV. Special Rules Applicable to Interests in Real Estate Ventures
V. Accounting for “Other” Investments – The Cost Method – ASC 325 (Superseded by ASU 2016-01)
VI. SEC Disclosure and Presentation Requirements
VII. International Standards