The following table identifies the changes made to this Subtopic.
This Subtopic provides guidance on applying the criteria for equity method accounting to investments in partnerships, unincorporated joint ventures, and limited liability companies.
See Section
323-10-05 for a discussion of the interaction of guidance in the multiple Subtopics within the Investments—Equity Method and Joint Ventures Topic.
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section
323-10-15, with specific transaction qualifications noted below.
This Subtopic provides guidance on applying the criteria for equity method accounting to investments in all of the following entities:
- a
Partnerships
- b
Unincorporated joint ventures
- c
Limited liability companies.
This Subtopic does not provide guidance for
investments in limited liability companies that are required to be accounted for as debt securities pursuant to paragraph 860-20-35-2. For guidance on accounting for an acquisition, development, and construction arrangement, see the
Acquisition, Development, and Construction Arrangements Subsection of Section 310-10-25.
For guidance on collaborative arrangements, see Topic
808.
The following table identifies the changes made to this Subtopic.
The following is the text of SEC Staff Announcement: Accounting for Limited Partnership Investments.
The SEC staff's position on the application of the equity method to investments in limited partnerships is that investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor's interest \"is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.\" The SEC staff understands that practice generally has viewed investments of more than 3 to 5 percent to be more than minor.