Handbooks | September 2022

Insight

Handbook: Investments

Our in-depth guide to the accounting, presentation and disclosures of investments in debt and equity securities.

Mark Northan

Mark Northan

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-6927

Lisa Blackburn

Lisa Blackburn

Partner, Dept. of Professional Practice, KPMG US

Danielle Imperiale

Danielle Imperiale

Managing Director, Dept. of Professional Practice, KPMG US

+1 212-954-3866


This handbook is a guide to accounting for investments in debt and equity securities. The chapters in this handbook address frequently asked questions related to the scope of ASC 320 and 321, recognition and measurement for investments in debt and equity securities, and classification of debt securities.

Applicability

  • Companies that hold investments in debt and equity securities

Relevant dates

  • Effective immediately

Perspectives on investment accounting

Investment accounting is how we refer to the accounting for debt and equity securities that don’t fall under other accounting models, such as the equity method or consolidation. These remaining investments typically give the investor limited (if any) influence over the investee.

The first comprehensive accounting and reporting guidance on investments in debt and equity securities was issued in 1993. Nearly 30 years later, some of those requirements and concepts are still present – including the core principles for classification and accounting for debt securities. But there have been several changes (especially for equity securities) as well as challenges in applying the guidance to new facts and circumstances and new types of investments.

In bringing this guidance together, we aim to help you effectively and efficiently identify the guidance that applies to different types of investments and understand the related accounting requirements. We walk you through available accounting options so that you can make the choice that is right for you.

Report contents

  • Scope and scope exceptions
  • Accounting for investments in debt securities
  • Classification of debt securities
  • Accounting for investments in equity securities

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