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 March 2021 edition incorporates updated guidance on:

• Significant influence with less than 20% stock ownership
• Accounting for tax credits by a tax equity investor
• Accounting for decreases in capital accounts when tax credits are distributed using the hypothetical liquidation at book value (HLBV) method

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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