United States

FASB Proposes Changes to Equity Method Accounting

Jun 10, 2015
From the Financial Reporting View

This edition of Defining Issues reports that the FASB recently issued a proposed Accounting Standards Update (ASU) that would eliminate certain requirements in applying the equity method of accounting to (1) 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), and (2) 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.

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