The EITF met on March 24, 2022 to deliberate Issue 21-A, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (PAM).
The EITF tentatively decided to expand the PAM as either a requirement or a policy election that would extend to all qualifying investments, regardless of the type of underlying project. The PAM is an alternative to either the cost or equity method of accounting and its scope is currently limited to investments in qualified affordable housing projects (e.g. low income housing tax credit or LIHTC investments) made through limited liability entities.
The EITF agreed to continue deliberating at a future meeting whether to revise the qualifying investment criteria under paragraph 323-740-25-1. Key considerations involve whether and how to clarify the criterion requiring that “substantially all of the projected benefits are from tax credits and other tax benefits.” Other topics for continued deliberation include disclosure and transition provisions.