# ASC 321-10-35: Investments—Equity Securities — Overall — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/321/10/#35-subsequent-measurement) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:2dd7f9b738ea1242ed8737c246710934543b085da4680897e7297f49a09b95ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 321-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/321/10/#35-subsequent-measurement) SEC content: no ##### [321-10-35-1](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:e360a16689eec93069298b926e329bc34068d824fa29f5c798d269aca2868b91 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as provided in paragraph [321-10-35-2](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2), investments in [equity securities](https://asc.understandingaccounting.org/glossary/e/#equity-security "Any security representing an ownership interest in an entity (for example, common, preferred, or other capital stock) or the right to acquire (for example, warrants, rights, forward purchase contracts, and call options) or dispose of (for example, put options and forward sale contracts) an ownership interest in an entity at fixed or determinable prices. The term equity security does not include any of the following: Written equity options (because they represent obligations of the writer, not investments) Cash-settled options on equity securities or options on equity-based indexes (because those instruments do not represent ownership interests in an entity) Convertible debt or preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor.") shall be measured subsequently at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") in the statement of financial position. Unrealized [holding gains and losses](https://asc.understandingaccounting.org/glossary/h/#holding-gain-or-loss "The net change in fair value of a security. The holding gain or loss does not include dividend or interest income recognized but not yet received, writeoffs, or the allowance for credit losses.") for equity securities shall be included in earnings. #### Equity Securities without Readily Determinable Fair Values ##### [321-10-35-2](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:849772a72496f99558d18883fa7d262225b707155cec05b02d6b9b4a728319c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity may elect to measure an equity security without a [readily determinable fair value](https://asc.understandingaccounting.org/glossary/r/#readily-determinable-fair-value "An equity security has a readily determinable fair value if it meets any of the following conditions: The fair value of an equity security is readily determinable if sales prices or bid-and-asked quotations are currently available on a securities exchange registered with the U.S. Securities and Exchange Commission (SEC) or in the over-the-counter market, provided that those prices or quotations for the over-the-counter market are publicly reported by the National Association of Securities Dealers Automated Quotations systems or by OTC Markets Group Inc. Restricted stock meets that definition if the restriction terminates within one year. The fair value of an equity security traded only in a foreign market is readily determinable if that foreign market is of a breadth and scope comparable to one of the U.S. markets referred to above. The fair value of an equity security that is an investment in a mutual fund or in a structure similar to a mutual fund (that is, a limited partnership or a venture capital entity) is readily determinable if the fair value per share (unit) is determined and published and is the basis for current transactions.") that does not qualify for the practical expedient to estimate fair value in accordance with paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) at its cost minus impairment, if any. If an entity identifies observable price changes in [orderly transactions](https://asc.understandingaccounting.org/glossary/o/#orderly-transaction "A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (for example, a forced liquidation or distress sale).") for the identical or a similar investment of the same issuer, it shall measure the equity security at fair value as of the date that the observable transaction occurred. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately. Once an entity elects to measure an equity security in accordance with this paragraph, the entity shall continue to apply the measurement guidance in this paragraph until the investment does not qualify to be measured in accordance with this paragraph (for example, if the investment has a readily determinable fair value or becomes eligible for the practical expedient to estimate fair value in accordance with paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59)). The entity shall reassess at each reporting period whether the equity investment without a readily determinable fair value qualifies to be measured in accordance with this paragraph. If an entity measures an equity security in accordance with this paragraph (and the security continues to qualify for measurement in accordance with this paragraph), the entity may subsequently elect to measure the equity security at fair value. If an entity subsequently elects to measure an equity security at fair value, the entity shall measure all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value. The election to measure those securities at fair value shall be irrevocable. Any resulting gains or losses on the securities for which that election is made shall be recorded in earnings at the time of the election. ##### [321-10-35-3](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:3fc04a654fc8e9241c7eedd417c2e34bfa7ef0d901561ecd2fe167c40871e44e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An equity security without a readily determinable fair value that does not qualify for the practical expedient to estimate fair value in accordance with paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) and is measured in accordance with paragraph [321-10-35-2](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2) shall be written down to its fair value if a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value, as determined using the guidance in paragraph [321-10-35-2](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-2). At each reporting period, an entity that holds an equity security shall make a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired. Impairment indicators that an entity considers include, but are not limited to, the following: 1. a A significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee 2. b A significant adverse change in the regulatory, economic, or technological environment of the investee 3. c A significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates 4. d A bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment 5. e Factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. ##### [321-10-35-4](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:de149a149070f26b7fc18eb12e8c64aee05dc9857beec22d28679b3d477b7161 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an equity security without a readily determinable fair value is impaired, an entity shall include an impairment loss in net income equal to the difference between the fair value of the investment and its carrying amount. That is, if the investment is deemed to be impaired after conducting the evaluation required by paragraph [321-10-35-3](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-3), the entity shall estimate the fair value of the investment to determine the amount of the impairment loss. #### Investment in Equity Securities of an Equity Method Investee ##### [321-10-35-5](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:2e1278988f77bf7072a7eb2af8ef6531dbfca0108d1db1abe5fde47df63b75ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [323-10-35-23 through 35-26](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-23) identify circumstances in which an entity must adjust the basis of its investment in equity securities of an equity method investee for the amount of an equity method loss based on the investment's seniority. For investments accounted for in accordance with this Subtopic, the adjusted basis resulting from the application of paragraphs [323-10-35-23 through 35-26](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-23) becomes the equity security's basis from which subsequent changes in fair value are measured. #### Dividend Income from Investments in Equity Securities ##### [321-10-35-6](https://asc.understandingaccounting.org/asc/321/10/#321-10-35-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:39:00.625Z to 2026-09-09T23:39:00.625Z Record version: sha256:7f3c32ab54d193a5a6ef1eb2abca04eb4c2bdd4b2f696e91b3f3e887b1c7c9c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dividend income from investments in equity securities shall be included in earnings.