Handbook: Equity method of accounting

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

Applicability

• All companies with equity method investments

Relevant dates

• Effective immediately

 Key impacts

This August 2021 edition incorporates updated accounting guidance on:

• Put/call arrangement on an investee’s equity
• Commitment (or option) to purchase an ownership interest in an equity method investee under ASC 815 (derivatives and hedging)
• Lease income or expense on an intra-entity operating lease
• Transition from the equity method to consolidation when control is obtained over a financial interest

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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