Handbooks | August 2021

 

Insight

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.

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

Related content

Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.

Receive timely updates on accounting and financial reporting topics from KPMG.

ARO

Use our Accounting Research Online for financial reporting resources.

Use our Accounting Research Online for financial reporting resources.