# ASC 323-10-30: Investments—Equity Method and Joint Ventures — Overall — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/323/10/#30-initial-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): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:8352fd0b1efda4027c933550ed89171f92f3d88f0aa2c0f2857bec0eb6b95c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/323/10/#30-initial-measurement) SEC content: no #### Terminology ##### [323-10-30-1](https://asc.understandingaccounting.org/asc/323/10/#323-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:efc3dfaa910dcdbf19fbed043b96f3e8dbd7872ed6012447bd343534e1b0ea2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [323-10-15-3](https://asc.understandingaccounting.org/asc/323/10/#323-10-15-3) explains that references in this Subtopic to [common stock](https://asc.understandingaccounting.org/glossary/c/#common-stock "A stock that is subordinate to all other stock of the issuer. Also called common shares.") refer to both common stock and [in-substance common stock](https://asc.understandingaccounting.org/glossary/i/#in-substance-common-stock "An investment in an entity that has risk and reward characteristics that are substantially similar to that entity's common stock.") that give the [investor](https://asc.understandingaccounting.org/glossary/i/#investor "A business entity that holds an investment in voting stock of another entity.") the ability to exercise [significant influence](https://asc.understandingaccounting.org/glossary/s/#significant-influence "Paragraphs 323-10-15-6323-10-15-7323-10-15-8323-10-15-9323-10-15-10323-10-15-11 define significant influence.") over operating and financial policies of an [investee](https://asc.understandingaccounting.org/glossary/i/#investee "An entity that issued an equity instrument that is held by an investor.") 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). #### The Equity Method—Overall Guidance ##### [323-10-30-2](https://asc.understandingaccounting.org/asc/323/10/#323-10-30-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:c6e2d12bd8e491e00c6f350d6ba86abdd3fb2c07ba269583b0dc68d7ea1b75af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/810/10/#810-10-40-3A) 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. ##### [323-10-30-2A](https://asc.understandingaccounting.org/asc/323/10/#323-10-30-2A) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:dfbc85e2c1eece7567612862a5df8a7ddd92c2719de7d613bfb3cd69a12b1771 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [323-10-30-2B](https://asc.understandingaccounting.org/asc/323/10/#323-10-30-2B) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:b319d9c0ffa3cef50f1c8344fe3cb98556d89320638f57c5cca205f6983daf7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A liability recognized under paragraph [323-10-25-2A](https://asc.understandingaccounting.org/asc/323/10/#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). #### Share-Based Compensation Granted to Employees and Nonemployees of an Equity Method Investee ##### [323-10-30-3](https://asc.understandingaccounting.org/asc/323/10/#323-10-30-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:02.034Z to 2026-09-09T23:40:02.034Z Record version: sha256:72f03ffd95bb0dcb444c8db091ed7e98cedc13e677cfea614ee214741375a2c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Share-based compensation cost recognized in accordance with paragraph [323-10-25-4](https://asc.understandingaccounting.org/asc/323/10/#323-10-25-4) shall be measured initially at fair value in accordance with Topic 718. Example 2 (see paragraph [323-10-55-19](https://asc.understandingaccounting.org/asc/323/10/#323-10-55-19)) illustrates the application of this guidance.