A PDF version of this publication is attached here: Equity method investments and joint ventures guide (PDF 2mb)
PwC is pleased to offer our updated Equity method investments and joint ventures guide. This guide discusses the identification of investments that are subject to the equity method of accounting guidance, and the initial and subsequent accounting for those investments. It also includes discussion of the accounting upon formation of a joint venture.
This guide summarizes the applicable accounting literature, including relevant references to and excerpts from the FASB’s Accounting Standards Codification (the Codification). It also provides our insights and perspectives, interpretative and application guidance, illustrative examples, and discussion on emerging practice issues.
This guide should be used in combination with a thorough analysis of the relevant facts and circumstances, review of the authoritative accounting literature, and appropriate professional and technical advice.
References to US GAAP
Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are clearly labelled. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. The remaining text is PwC’s original content.
References to other PwC guidance
This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. The other PwC guides referred to in this guide, including their abbreviations, are:

Summary of significant changes
The following is a summary of recent noteworthy revisions to the guide. Additional updates may be made to future versions to keep pace with significant developments.
Revisions made in May 2024
Chapter 3: Initial measurement of equity method investments
  • EM 3.2.4 was updated to clarify how to recognize the tax effects of the investor’s amortization of its basis differences.
Revisions made in March 2024
Chapter 2: Ability to exercise significant influence
  • EM 2.2 was updated to enhance the examples on assessing the ability to exercise significant influence when an investor’s investment is less than 20%.
Revisions made in September 2023
Chapter 6: Joint ventures
  • EM 6.4.1 was updated to reflect accounting by the joint venture entity for contributions received at formation, after adoption of ASU 2023-05, Business Combinations—Joint Venture Formations. The content previously in EM 6.4.1 on current accounting for contributions received at formation (before ASU 2023-05) was moved to EM 6.4.1A.
Revisions made in June 2023
Chapter 1: Scope
  • EM 1.3.6 was updated to reflect the accounting for investments in tax credit entities after adoption of ASU 2023-02, including the broader application of the proportional amortization method. The content previously in EM 1.3.6, on current accounting for investments in tax credit entities, was moved to EM 1.3.6A.

This publication has been prepared for general informational purposes, and does not constitute professional advice on facts and circumstances specific to any person or entity. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The information contained in this publication was not intended or written to be used, and cannot be used, for purposes of avoiding penalties or sanctions imposed by any government or other regulatory body. PricewaterhouseCoopers LLP, its members, employees, and agents shall not be responsible for any loss sustained by any person or entity that relies on the information contained in this publication. Certain aspects of this publication may be superseded as new guidance or interpretations emerge. Financial statement preparers and other users of this publication are therefore cautioned to stay abreast of and carefully evaluate subsequent authoritative and interpretative guidance.
The FASB Accounting Standards Codification® material is copyrighted by the Financial Accounting Foundation, 801 Main Avenue, Norwalk, CT 06851, and is reproduced with permission.
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