FASB: Equity method accounting proposals

FASB: Equity method accounting proposals

The FASB recently issued a proposed Accounting Standards Update (ASU) that would eliminate certain requirements in applying the equity method of accounting to:


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  • Account for the difference between the cost of an investment and the investor's proportionate share of the net assets of an investee (the basis difference)
  • Retroactively apply the equity method when an increase in ownership interest in the investee triggers a change from the cost method to the equity method

The proposed ASU is part of the FASB's simplification initiative. Comments are due by August 4, 2015.


Read a June 2015 report [PDF 544 KB] prepared by KPMG LLP: Defining Issues: FASB Proposes Changes to Equity Method Accounting

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