Handbooks | October 2020



Handbook: Equity method of accounting

Latest edition: We explain the equity method of accounting in detail, providing examples and analysis.

Angie Storm

Angie Storm

Partner, Dept. of Professional Practice, KPMG US

+1 212-909-5488

Matt Drucker

Matt Drucker

Partner, Audit, KPMG US

+1 212-872-3584

KPMG provides detailed guidance on and interpretation of ASC 323, providing examples and analysis.


  • All companies with equity method investments

Relevant dates

  • Effective immediately

 Key impacts

This October 2020 edition incorporates updated guidance on:

  • Carried interest and equity method investments
  • A ‘commitment to purchase’ subject to one or more contingencies
  • Investments resulting in a bargain purchase
  • Accounting for equity method investments on a lag

Report contents

  • Scope
  • Initial recognition and measurement
  • Recognizing investee activity
  • Recognizing investor-level adjustments
  • Changes in ownership and degree of influence
  • Presentation and disclosure

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