Determine if your investments meet the criteria for the equity method of accounting under ASC 323.
Accounting for equity investments
The equity method can only be applied to equity investments, but multiple accounting methods for equity investments exist under US GAAP.
Equity method, fair value, or consolidation?
When determining which accounting method to apply, the biggest question is whether or not you can use the equity method. Our tool makes it easy.
Step-by-step questions and a quick answer
The tool will guide you through a series of questions and give you a determination immediately upon completion.
About the Equity Method Investment Identifier:
In today’s business environment, many companies include equity investing as a strategy to achieve their financial targets. While the variety of equity instruments a company can invest in often helps maintain a robust and diverse investment portfolio, it also requires navigating complicated accounting rules. Investors must be proficient and knowledgeable in several different accounting treatments to properly account for their array of investments under US GAAP.
The first step to accurately account for an equity investment is ensuring the correct accounting method is applied. Focusing on the equity method of accounting, this free tool walks investors through the complex scoping criteria. By separating the analysis into individual steps that cover the multiple factors to consider, your company can efficiently conclude whether an individual investment should be accounted for under the equity method. In addition, our free tool can be used by investors as a guide to prepare complete supporting documentation of analysis and conclusions.