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As further described in EM 3.2.3, an investor may issue a guarantee to a third party on behalf of an equity method investee. In such situations, the investor should consider the guidance in ASC 460, Guarantees, and if applicable record a liability to reflect its obligation. ASC 460 does not prescribe a specific account for the guarantor’s offsetting entry when it recognizes a liability at the inception of a guarantee. That offsetting entry depends on the circumstances in which the guarantee was issued. See ASC 460-10-55-23 for implementation guidance.
Subsequent accounting for the guarantee would be in accordance with ASC 460, and therefore would not impact the carrying amount of the equity method investment (i.e., the subsequent accounting for the equity method investment is governed by ASC 323). Subsequent changes in the fair value of the guarantee would be recorded separately from the equity method investment.
FSP 23.6 illustrates the required disclosures when accounting for a guarantee.

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