PwC comments on the FASB's proposed equity method simplifications
July 28, 2015
PwC submitted comments on the FASB’s proposed Accounting Standards Update, Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Equity Method of Accounting. We agree that the current accounting for equity method investments is complex, and its benefits to users do not always justify the related costs. Therefore, we support the objective of simplifying the equity method of accounting.
The board has proposed two simplifications in the exposure draft. We support the proposal to eliminate the requirement to retroactively adopt the equity method (when an existing investment first qualifies for the equity method) and believe this proposal meets the objective of the Simplification Initiative. However, we do not support the proposal to eliminate the accounting for basis differences. We believe this proposal would reduce the usefulness of financial reporting because it would not faithfully represent an investment’s performance in relation to its underlying economics.

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Comments on Proposed ASU: Simplifying the Equity Method of Accounting (PDF 170kb)


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