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.
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.