{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/323/10/#30-initial-measurement","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":"323","topic_title":"Investments—Equity Method and Joint Ventures","subtopic":"323-10","subtopic_title":"Overall","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":"Terminology","paragraphs":[{"citation":"323-10-30-1","para":"30-1","html":"
Paragraph 323-10-15-3 explains that references in this Subtopic to common stock refer to both common stock and in-substance common stock that give the investor the ability to exercise significant influence over operating and financial policies of an investee even though the investor holds 50% or less of the common stock or in-substance common stock (or both common stock or in-substance common stock).
","snippet":"Paragraph 323-10-15-3 explains that references in this Subtopic to common stock refer to both common stock and in-substance common stock that give the investor the ability to exercise significant influence over operating…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:efc3dfaa910dcdbf19fbed043b96f3e8dbd7872ed6012447bd343534e1b0ea2c","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87cfcc1d24e7f2b7ab8b0d2b6dc2c27a44a5acd1469d07b681e95b360e09f112","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}},{"block":null,"heading":"The Equity Method—Overall Guidance","paragraphs":[{"citation":"323-10-30-2","para":"30-2","html":"
Except as provided in the following sentence, an investor shall measure an investment in the common stock of an investee (including a joint venture) initially at cost in accordance with the guidance in Section 805-50-30. An investor shall initially measure, at fair value, the following:
  1. a
    A retained investment in the common stock of an investee (including a joint venture) in a deconsolidation transaction in accordance with paragraphs
    810-10-40-3A through 40-5
  2. b
    An investment in the common stock of an investee (including a joint venture) recognized upon the derecognition of a distinct nonfinancial asset or distinct in substance nonfinancial asset in accordance with Subtopic 610-20.
","snippet":"Except as provided in the following sentence, an investor shall measure an investment in the common stock of an investee (including a joint venture) initially at cost in accordance with the guidance in Section 805-50-30.…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c6e2d12bd8e491e00c6f350d6ba86abdd3fb2c07ba269583b0dc68d7ea1b75af","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}},{"citation":"323-10-30-2A","para":"30-2A","html":"
Contingent consideration shall only be included in the initial measurement of an equity method investment if it is required to be recognized by specific authoritative guidance other than Topic 805.
","snippet":"Contingent consideration shall only be included in the initial measurement of an equity method investment if it is required to be recognized by specific authoritative guidance other than Topic 805.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dfbc85e2c1eece7567612862a5df8a7ddd92c2719de7d613bfb3cd69a12b1771","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}},{"citation":"323-10-30-2B","para":"30-2B","html":"
A liability recognized under paragraph 323-10-25-2A shall be measured initially at an amount equal to the lesser of the following:
  1. a
    The maximum amount of contingent consideration not otherwise recognized
  2. b
    The excess of the investor's share of the investee's net assets over the initial cost measurement (including contingent consideration otherwise recognized).
","snippet":"A liability recognized under paragraph 323-10-25-2A shall be measured initially at an amount equal to the lesser of the following:\n(a) The maximum amount of contingent consideration not otherwise recognized\n(b) The exces…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b319d9c0ffa3cef50f1c8344fe3cb98556d89320638f57c5cca205f6983daf7d","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8930af5b14ac2f05e319f4a99e81257c2fd3903a840694bb198471e99f8b593","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}},{"block":null,"heading":"Share-Based Compensation Granted to Employees and Nonemployees of an Equity Method Investee","paragraphs":[{"citation":"323-10-30-3","para":"30-3","html":"
Share-based compensation cost recognized in accordance with paragraph 323-10-25-4 shall be measured initially at fair value in accordance with Topic 718. Example 2 (see paragraph 323-10-55-19) illustrates the application of this guidance.
","snippet":"Share-based compensation cost recognized in accordance with paragraph 323-10-25-4 shall be measured initially at fair value in accordance with Topic 718. Example 2 (see paragraph 323-10-55-19) illustrates the application…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:72f03ffd95bb0dcb444c8db091ed7e98cedc13e677cfea614ee214741375a2c9","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07a4d969e9cedb5afa3be2bbe42d5f1c90f5b0aa2e97b4e64f2d968567a99ec6","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8352fd0b1efda4027c933550ed89171f92f3d88f0aa2c0f2857bec0eb6b95c99","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8352fd0b1efda4027c933550ed89171f92f3d88f0aa2c0f2857bec0eb6b95c99","downloaded_from":"2026-09-09T23:40:02.034Z","last_downloaded_at":"2026-09-09T23:40:02.034Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481755","source_sha256":"4c119ceefb63bbb5c0e601637081bd5f16f0986fd01bd91edd5b5ae6237c9678"}}