Expand
ASC 323-10-45-1 requires an investment in common stock accounted for under the equity method to be shown as a single amount on the investor's balance sheet. Multiple equity method investments can be aggregated for purposes of presentation on the balance sheet. In addition, a reporting entity may combine an investment in common stock with advances or investments in senior or other securities of an investee in a single amount for purposes of balance sheet presentation; however, disclosure of the types of investments will generally be required.
When labeling the balance sheet caption for an equity investment, the term "investments at equity" should be used only in circumstances where the carrying amount of the investment equals the investor's underlying equity in investee net assets. Generally, the basis of accounting should be described in a footnote rather than in the balance sheet caption.
An investor's share of losses of an investee may exceed the carrying amount of the investment accounted for under the equity method. In certain circumstances, an investor may continue to recognize its share of investee losses in excess of the investor's carrying amount of the investment, resulting in a balance sheet credit. In such circumstances, the carrying amount should be classified as a liability. The balance sheet caption should be appropriately descriptive to reflect the nature of this liability (e.g., "accumulated losses of unconsolidated companies in excess of investment," "estimated losses on investment," or "estimated liability–guarantee of obligation of unconsolidated affiliate"). See EM 4.5 for further information.
Question FSP 10-1
Is a reporting entity permitted to separately present its share of each asset and liability of its investee individually?
PwC response
Typically, an investor is not permitted to separately present its share of each asset and liability of an investee (the so-called "expanded equity" or "proportionate consolidation" approach). However, as discussed in ASC 810-10-45-14, a reporting entity is permitted to use the proportionate consolidation approach to account for a noncontrolling interest in an unincorporated legal entity when the investee's activities are in the extractive or construction industries. An investor also may use proportionate consolidation to present undivided ownership interests in assets provided certain conditions are met. For more information on proportionate consolidation, see CG 8.4.
Expand Expand
Resize
Tools
Rcl

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide