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ASC 321-10-50 provides disclosure guidance on equity investments (not accounted for under the equity method of accounting or resulting in consolidation). The disclosure requirements apply for investments held at the end of the periods presented in the financial statements.
Additional disclosures could be required for investments measured at fair value, see FSP 20.4.

12.6.1 Measurement alternative disclosures

As explained in LI 2.3.2, ASC 321-10-35-2 provides an elective measurement alternative for equity investments without readily determinable fair values. When a reporting entity elects the measurement alternative in ASC 321, ASC 321-10-50-3 lists specific disclosure requirements for investments measured under this election.
In each interim and annual reporting period, the following disclosures are required for equity investments that are accounted for under the measurement alternative:
  • The carrying amount of these equity investments
  • The amount of impairments and downward adjustments, if any, on both an annual and cumulative basis
  • The amount of upward adjustments, if any, on both an annual and cumulative basis
  • Additional information (in narrative form) that is sufficient to permit financial statement users to understand the quantitative disclosures and the information that the entity considered in reaching the carrying amounts and upward or downward adjustments resulting from observable price changes.
We believe that these disclosures should only include equity investments that are accounted for under the measurement alternative held by the reporting entity at the end of the period.
The additional information supporting the quantitative disclosures is required as of the date of the most recent statement of financial position, so comparative narrative disclosure is not required. All other disclosures should be provided for all comparative years presented in the financial statements.
Additionally, as the measurement alternative is a nonrecurring fair value measurement, an entity should follow the applicable disclosure requirements in ASC 820-10-50.
The carrying value disclosed should agree to the amounts recorded on the statement of financial position as of the period end date for each period presented.
Impairments and adjustments due to observable prices
ASC 321-10-50-3 specifically requires disclosure of the upward and downward adjustments on a gross basis; they should not be combined into one net number. However, we believe that downward adjustments due to impairments and downward adjustments due to observable price changes can be combined for the purposes of this disclosure. That said, reporting entities should consider whether separate presentation of impairments and downward adjustments due to observable price changes would provide decision-useful information to users of the financial statements.
In interim periods, impairments and adjustments due to observable price changes should be presented both on a quarter-to-date and year-to-date basis consistent with the income statement periods presented.

12.6.2 Disclosures for all equity investments

Separate from the disclosures for equity investments accounted for under the measurement alternative, ASC 321-10-50-4 requires reporting entities to disclose the amount of unrealized gains and losses for all equity investments for each period in which a statement of operations is presented. This disclosure includes equity investments accounted for under the measurement alternative and equity investments that are reported on a fair value basis.
ASC 321 provides an example of the formula for calculating the unrealized gains and losses to be disclosed.

Excerpt from ASC 321-10-50-4

Net gains and losses recognized during the period on equity securities
$105
Less: Net gains and losses recognized during the period on equity securities sold during the period
(80)
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date
$25

Only the amount of unrealized gains and losses on equity investments still held at the reporting date (i.e., the $25) is required to be disclosed, though a reporting entity is not precluded from presenting how this number was calculated.
Refer to FSP 20 for the required disclosures related to fair value, including disclosure requirements for equity securities subject to contractual sale restrictions as a result of ASU 2022-03. Refer to FV 4.8 for fair value measurement considerations for restricted securities.
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