# ASC 323-10-S99: Investments—Equity Method and Joint Ventures — Overall — SEC 99 SEC Materials Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/323/10/#sec-99-sec-materials) 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): 2026-09-09T23:40:38.151Z to 2026-09-09T23:40:38.151Z Record version: sha256:e80b6184128682a10dd320306ff8892b2572f1477e43d658bfe56defef924777 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-10-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/323/10/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [323-10-S99-1](https://asc.understandingaccounting.org/asc/323/10/#323-10-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:38.151Z to 2026-09-09T23:40:38.151Z Record version: sha256:9985df7cdf74e2bbd14ffc563bdba7a40684ff0ff4945d9ed8163891880a619f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text from SAB Topic 6.K.3, Undistributed Earnings of 50% or Less Owned Persons. - Facts: Rule 4-08(e)(2) of Regulation SX requires footnote disclosures of the amount of consolidated retained earnings which represents undistributed earnings of 50% or less owned persons (investee) accounted for by the equity method. The test adopted in ASR 302 to trigger disclosures about the registrant's restricted net assets (Rule 4-08(e)(3)) includes the parent's equity in the undistributed earnings of investees. - Question: Is the amount required for footnote disclosure the same as the amount included in the test to determine disclosures about restrictions? - Interpretive Response: Yes. The amount used in the test in Rule 4-08(e)(3) should be the same as the amount required to be disclosed by Rule 4-08(e)(2). This is the portion of the registrant's consolidated retained earnings which represents the undistributed earnings of an investee since the date(s) of acquisition. It is computed by determining the registrant's cumulative equity in the investee's earnings, adjusted by any dividends received, related goodwill write-downs, and any related income taxes provided. ##### [323-10-S99-2](https://asc.understandingaccounting.org/asc/323/10/#323-10-S99-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:38.151Z to 2026-09-09T23:40:38.151Z Record version: sha256:04ab93f6fab935c7a9b30aed853362639d68e5fb948ae6cbf91fc675efa94d06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SAB Topic 6.K.4.b, Application of Significant Subsidiary Test to Investees and Unconsolidated Subsidiaries. - b. Summarized financial statement requirements. - Facts: Rule 4-08(g) of Regulation S-X requires summarized financial information about unconsolidated subsidiaries and 50% or less owned persons (investee) to be included in the footnotes to the financial statements if, in the aggregate, they meet the tests of a significant subsidiary set forth in Rule 1-02(w). - Question 1: Must a registrant which includes separate financial statements or condensed financial statements for unconsolidated subsidiaries or investees in its annual report to shareholders also include in such report the summarized financial information for these entities pursuant to Rule 4-08(g)? - Interpretive Response: No. The purpose of the summarized information is to provide minimum standards of disclosure when the impact of such entities on the consolidated financial statements is significant. If the registrant furnishes more information in the annual report than is required by these minimum disclosure standards, such as condensed financial information or separate audited financial statements, the summarized data can be excluded. The Commission's rules are not intended to conflict with the provisions of FASB ASC subparagraph [323-10-50-3(c)](https://asc.understandingaccounting.org/asc/323/10/#323-10-50-3) (Investments—Equity Method and Joint Ventures Topic) which provide that either separate financial statements of investees be presented with the financial statements of the reporting entity or that summarized information be included in the reporting entity's financial statement footnotes. - Question 2: Can summarized information be omitted for individual entities as long as the aggregate information for the omitted entity(s) does not exceed 10% under any of the significance tests of Rule 1-02(w)? - Interpretive Response: The 10% measurement level of the significant subsidiary rule was not intended to establish a materiality criteria for omission, and the arbitrary exclusion of summarized information for selected entities up to a 10% level is not appropriate. Rule 4-08(g) requires that the summarized information be included for all unconsolidated subsidiaries and investees. However, the staff recognizes that exclusion of the summarized information for certain entities is appropriate in some circumstances where it is impracticable to accumulate such information and the summarized information to be excluded is de minimis. ##### [323-10-S99-3](https://asc.understandingaccounting.org/asc/323/10/#323-10-S99-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:38.151Z to 2026-09-09T23:40:38.151Z Record version: sha256:f3e12aabecf483127c28c7626b161d65d33eeb8655ff62df81c64aa9d6b46876 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2010-04](https://asc.understandingaccounting.org/updates/asu-2010-04/). ##### [323-10-S99-4](https://asc.understandingaccounting.org/asc/323/10/#323-10-S99-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:38.151Z to 2026-09-09T23:40:38.151Z Record version: sha256:bba13c052777846b5f83c534f3164b0f3ed41970130015e8e1d6657d3e4bdfd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. - Paragraph [323-10-25-3](https://asc.understandingaccounting.org/asc/323/10/#323-10-25-3) provides guidance on the accounting by an investor for stock-based compensation based on the investor's stock granted to employees of an equity method investee. Investors that are SEC registrants should classify any income or expense resulting from application of this guidance in the same income statement caption as the equity in earnings (or losses) of the investee.