{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/321/958/#15-scope-and-scope-exceptions","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"321","topic_title":"Investments—Equity Securities","subtopic":"321-958","subtopic_title":"Not-for-Profit Entities","section":{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"321-958-15-1","para":"15-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_35373265-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic; see Section <a altsource=\"GUID-0DD748A2-DAEB-4A20-B494-CB4C774CFCAE.ditamap\" class=\"ditamap\">958-10-15</a>, with specific exceptions noted below.</span></span> </div> </div>","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic; see Section 958-10-15, with specific exceptions noted below.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b461ae6dcf23e8afad05ab990cbe6f65177e2988886e3e6f8dc0d06eeb95bf1e","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09f912240ad7244ccedba78788eaa9e7288788e0b4e6cc226b895509a02e82a6","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"block":null,"heading":"Instruments","paragraphs":[{"citation":"321-958-15-2","para":"15-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_353734C2-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The measurement guidance in Section <a altsource=\"GUID-00967A00-FCC4-4535-AA88-DA0195A0E06C.ditamap\" class=\"ditamap\">958-321-35</a> applies to all investments in <a href=\"/glossary/e/#equity-security\" class=\"term\" title=\"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.\"><span>equity securities</span></a> and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures, and limited liability companies as if those other ownership interests are equity securities.</span></span> </div> </div>","snippet":"The measurement guidance in Section 958-321-35 applies to all investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures, and limited…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:462e620ccd082783a8d9d71b1882e6e68ef821c3816ad8da380fc835311d3308","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"citation":"321-958-15-3","para":"15-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_353736ED-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The reporting guidance in Sections <a altsource=\"GUID-AC0D0CC1-DDCF-4D13-A7F7-95A3D6E49D4A.ditamap\" class=\"ditamap\">958-220-45</a> and <a altsource=\"GUID-DD5C5BC6-5002-4EED-91CE-458F93C6D262.ditamap\" class=\"ditamap\">958-320-50</a> applies to all investments held by <a href=\"/glossary/n/#not-for-profit-entity\" class=\"term\" title=\"An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.\"><span>not-for-profit entities</span></a> (NFPs), except those described in paragraph <a href=\"/asc/321/958/#321-958-15-4\" class=\"xref\">958-321-15-4</a>. </span></span> </div> </div>","snippet":"The reporting guidance in Sections 958-220-45 and 958-320-50 applies to all investments held by not-for-profit entities (NFPs), except those described in paragraph 958-321-15-4.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9d179327c5824c8631140f819739ee0d1d70423fd3c47735b21ada1c26c01ac3","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"citation":"321-958-15-4","para":"15-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_3537392B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The guidance in this Subtopic does not apply to any of the following: </span></span> <ol class=\"ol-norm\"> <li class=\"li-norm\"><span class=\"linum\">a</span> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_35373AF7-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An investment in equity securities that the investor accounts for under the equity method in accordance with paragraph <a href=\"/asc/810/958/#810-958-15-4\" class=\"xref\">958-810-15-4</a>. </span></span> </div> </li> <li class=\"li-norm\"><span class=\"linum\">b</span> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_35373CDA-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An investment in a subsidiary that the investor consolidates in accordance with paragraph <a href=\"/asc/810/958/#810-958-15-4\" class=\"xref\">958-810-15-4</a> or <div class=\"xref-range displayInline\"><a href=\"/asc/810/958/#810-958-25-2\" class=\"xref\">958-810-25-2 through 25-4</a></div>. </span></span> </div> </li> <li class=\"li-norm\"><span class=\"linum\">c</span> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_35373E94-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">An investment in a derivative instrument that is subject to the requirements of Topic <a altsource=\"GUID-128369CC-8E3A-4A7E-8F25-33E42B0761E4.ditamap\" class=\"ditamap\">815</a>. That is, an investment in an option on securities shall be accounted for under the requirements of Subtopic <a altsource=\"GUID-F827BBCC-41BF-479A-9C1D-5A5E98904787.ditamap\" class=\"ditamap\">815-10</a> if the option meets the definition of a derivative instrument, including the criteria for net settlement in paragraph <a href=\"/asc/815/10/#815-10-15-99\" class=\"xref\">815-10-15-99</a>. </span></span> </div> </li> <li class=\"li-norm\"><span class=\"linum\">d</span> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_3537408E-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Short sales of securities (sales of securities that the seller does not own at the time of sale), because they are obligations to deliver securities, not investments. Short-sale obligations are addressed in the guidance for certain industries (see paragraph <a href=\"/asc/320/940/#320-940-35-1\" class=\"xref\">940-320-35-1</a> with respect to broker-dealers and paragraph <a href=\"/asc/405/942/#405-942-35-1\" class=\"xref\">942-405-35-1</a> with respect to depository institutions). For guidance on evaluating whether a short-sale transaction involves a derivative instrument, see paragraph <a href=\"/asc/815/10/#815-10-55-57\" class=\"xref\">815-10-55-57</a>.</span></span> </div> </li> <li class=\"li-norm\"><span class=\"linum\">e</span> <div class=\"p\"> <span class=\"sfragment\" id=\"sfr_35374285-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Investments held by a <a href=\"/glossary/f/#financially-interrelated-entities\" class=\"term\" title=\"A recipient entity and a specified beneficiary are financially interrelated entities if the relationship between them has both of the following characteristics: One of the entities has the ability to influence the operating and financial decisions of the other. One of the entities has an ongoing economic interest in the net assets of the other.\"><span>financially interrelated entity</span></a>. See Subtopic <a altsource=\"GUID-19BFF742-72F5-4086-A87F-23E35341C64A.ditamap\" class=\"ditamap\">958-20</a> for reporting interests in the <a href=\"/glossary/n/#net-assets\" class=\"term\" title=\"The excess or deficiency of assets over liabilities of a not-for-profit entity, which is divided into two mutually exclusive classes according to the existence or absence of donor-imposed restrictions. See Net Assets with Donor Restrictions and Net Assets without Donor Restrictions.\"><span>net assets</span></a> of a financially interrelated entity.</span></span> </div> </li> </ol> </div> </div>","snippet":"The guidance in this Subtopic does not apply to any of the following:\n(a) An investment in equity securities that the investor accounts for under the equity method in accordance with paragraph 958-810-15-4.\n(b) An invest…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d902b2f8d7205f60800800f06d0fd64449936a3c0185f2c31b83bbab18fc565","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"citation":"321-958-15-5","para":"15-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_35374436-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If an investment otherwise would be in the scope of this Subtopic and it has within it an embedded derivative that is subject to the requirements of Topic <a altsource=\"GUID-128369CC-8E3A-4A7E-8F25-33E42B0761E4.ditamap\" class=\"ditamap\">815</a>, the host contract (as described in paragraph <a href=\"/asc/815/15/#815-15-05-1\" class=\"xref\">815-15-05-1</a>) remains within the scope of this Subtopic.</span></span> </div> </div>","snippet":"If an investment otherwise would be in the scope of this Subtopic and it has within it an embedded derivative that is subject to the requirements of Topic 815, the host contract (as described in paragraph 815-15-05-1) re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84fe3dae35284b88f665058f9d278ea65bd84fb93f226bceff7f2f8edef07d7b","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"citation":"321-958-15-6","para":"15-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_35374692-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In determining whether an instrument is within the scope of this Subtopic, an entity shall not look through the form of its investment to the nature of the securities held by an investee. For example, an entity invests in a limited partnership interest (or a venture capital entity) that meets the definition of an equity security. However, substantially all of the partnership's assets consist of investments in debt securities. In the specific situation described, the investment would be considered an equity security. </span></span> </div> </div>","snippet":"In determining whether an instrument is within the scope of this Subtopic, an entity shall not look through the form of its investment to the nature of the securities held by an investee. For example, an entity invests i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f04ef3aa6341f48ee5ef0926f8b19dd7524386c7c08c01c095cf2e21671e0308","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2777d825c8b2d5058f30f835e78d61cf86930b33ffbd2216698123403882e9e6","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},{"block":null,"heading":"Other Considerations","paragraphs":[{"citation":"321-958-15-7","para":"15-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_35374863-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Subtopic does not specify methods to be used for measuring the amount of dividend income. </span></span> </div> </div>","snippet":"This Subtopic does not specify methods to be used for measuring the amount of dividend income.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f5a1de803f66a9e4e0a28ac7e8087029e416e0ec5055aa2df95b6c075ed578f0","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7d4fb331a36114d3f00a51665862bf8c58a4bf1eb2ea3575891fc42c6e6ed28","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:04d4cbe60a9ef2b62273f6076e44fea9b92153fb1d5f8a03c07127fed046ff60","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:04d4cbe60a9ef2b62273f6076e44fea9b92153fb1d5f8a03c07127fed046ff60","downloaded_from":"2026-09-09T23:39:24.310Z","last_downloaded_at":"2026-09-09T23:39:24.310Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478545","source_sha256":"33a20b5d0fa66e9561bcf2289913b37abfab795bc913792c777161a8bc1c4652"}}