# ASC 323-30: Investments—Equity Method and Joint Ventures — Partnerships, Joint Ventures, and Limited Liability Entities Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/323/30/) 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): 2026-09-09T23:40:40.753Z to 2026-09-09T23:41:05.466Z Record version: sha256:ae56c9e226775273598c68b5edfbb656f0cd8c611c665726814a259d61eeef56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30: Investments—Equity Method and Joint Ventures — Partnerships, Joint Ventures, and Limited Liability Entities ### Machine-generated study aids ```json { "summary": "ASC 323-30 extends equity method concepts to investments in unincorporated entities—partnerships, unincorporated joint ventures (undivided interests in ventures), and limited liability companies—that are outside the literal scope of Subtopic 323-10 (which addresses common stock of corporations). Investors generally apply the equity method by analogy when they can exercise significant influence over the investee (323-30-25-1), including the intra-entity profit elimination rules of 323-10-35-7. An LLC that maintains a specific ownership account for each investor is treated like a limited partnership interest in deciding between Topic 321 and the equity method (323-30-35-3).", "key_points": [ "This Subtopic applies the criteria for equity method accounting to investments in partnerships, unincorporated joint ventures, and limited liability companies (323-30-15-2), following the scope of Section 323-10-15.", "Investors in unincorporated entities generally account for their investments using the equity method by analogy to Subtopic 323-10 if the investor has the ability to exercise significant influence over the investee (323-30-25-1).", "Elimination of intra-entity profits and the accounting for income taxes under paragraph 323-10-35-7 apply to unincorporated joint ventures (323-30-25-2) and to partnership interests (323-30-35-2).", "Partnership profits and losses accrued by investor-partners are reflected in the investor's financial statements as described in paragraphs 323-10-45-1 through 45-2 (323-30-35-1).", "Income taxes must be provided on profits accrued by investor-partners regardless of the tax basis used in the partnership return, because the tax liabilities relate directly to the partners; Topic 740 accounting applies (323-30-35-2).", "An LLC that maintains a specific ownership account for each investor (similar to a partnership capital account) is viewed like a limited partnership investment when deciding whether a noncontrolling investment falls under Topic 321 or the equity method (323-30-35-3).", "The Subtopic does not address investments in LLCs required to be accounted for as debt securities under paragraph 860-20-35-2 (323-30-15-4); discontinuance of the equity method for a limited partnership is addressed in 323-10-35-39." ], "categories": [ "Recognition", "Subsequent measurement", "Income taxes", "Consolidation" ], "audience_level": "intermediate", "student_note": "Exam questions often hinge on the fact that ASC 323-10 literally covers only common stock, so partnership and LLC interests get equity method treatment \"by analogy\" under 323-30—and the significant-influence threshold for limited partnerships is much lower (roughly more than 3–5%) than the 20% corporate presumption. A common misunderstanding is assuming the partnership's pass-through tax status eliminates deferred tax accounting; 323-30-35-2 requires taxes on accrued profits regardless of the partnership's tax basis.", "related_topics": [ "323-10", "970-323", "321", "808", "740", "310-10" ], "key_concepts": [ "equity method by analogy", "significant influence", "partnership interests", "unincorporated joint ventures", "limited liability company", "specific ownership account", "intra-entity profit elimination", "undivided interests" ] } ``` Source downloaded (UTC): 2026-09-09T23:40:40.753Z to 2026-09-09T23:40:40.753Z Record version: sha256:8f6220039fe45a5d6a836aa06f93bca7c759bc77840ace7a0d3fb310620f650b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/323/30/#00-status) SEC content: no ##### [323-30-00-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:40.753Z to 2026-09-09T23:40:40.753Z Record version: sha256:f5a07db22ca44db1f8edcc105bfcb5160775ee642773767072fe5ae9a8dd95dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
323-30-35-3AmendedAccounting Standards Update No. 2016-0101/05/2016
323-30-35-4AmendedAccounting Standards Update No. 2016-0101/05/2016
323-30-60-2SupersededAccounting Standards Update No. 2016-0101/05/2016
Source downloaded (UTC): 2026-09-09T23:40:43.763Z to 2026-09-09T23:40:43.763Z Record version: sha256:9cb7758afbdb1533554cf62ba4b7c917e9d57b83f7cab19978cfe69dd0a42190 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/323/30/#05-overview-and-background) SEC content: no ##### [323-30-05-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:43.763Z to 2026-09-09T23:40:43.763Z Record version: sha256:87a14dbd1786d5ca46bf75604d3c63fa0de24aecde061f0c86e1504f60269257 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on applying the criteria for equity method accounting to investments in partnerships, unincorporated joint ventures, and limited liability companies. ##### [323-30-05-2](https://asc.understandingaccounting.org/asc/323/30/#323-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:43.763Z to 2026-09-09T23:40:43.763Z Record version: sha256:026e3f29eadb7d9310ca829b065367d229b4b34efc8fd1f1d142e4ad3222c077 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-09T23:40:46.207Z to 2026-09-09T23:40:46.207Z Record version: sha256:926a5537cd6a6fa29eb599c7945bcc28ce5852e01a48a1f974eefa978e7c833d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/323/30/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [323-30-15-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:46.207Z to 2026-09-09T23:40:46.207Z Record version: sha256:ff0ca42d7876856a328716c57adb7fd35c8b081c12b8043b80fca721732643f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Transactions ##### [323-30-15-2](https://asc.understandingaccounting.org/asc/323/30/#323-30-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:46.207Z to 2026-09-09T23:40:46.207Z Record version: sha256:bf8d0bbd8f22d1ce10d80daa9a25f76a47e695c76333373ecca41b55edb442e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on applying the criteria for equity method accounting to investments in all of the following entities: 1. a Partnerships 2. b Unincorporated joint ventures 3. c Limited liability companies. ##### [323-30-15-3](https://asc.understandingaccounting.org/asc/323/30/#323-30-15-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:46.207Z to 2026-09-09T23:40:46.207Z Record version: sha256:ded2c8e0023bb63668ded1aaad7f320b92685f3bdad15d5ac34ed22259b579f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although Subtopic 323-10 applies only to investments in [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.") of corporations and does not cover investments in partnerships and unincorporated joint ventures (also called undivided interests in ventures), many of the provisions of that Subtopic would be appropriate in accounting for investments in these unincorporated entities as discussed within this Subtopic. ##### [323-30-15-4](https://asc.understandingaccounting.org/asc/323/30/#323-30-15-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:46.207Z to 2026-09-09T23:40:46.207Z Record version: sha256:7c39dc36af84c5419b42bf21f5950d30f14163a086fe44ef4cba7503040a0c97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/860/20/#860-20-35-2). Source downloaded (UTC): 2026-09-09T23:40:50.508Z to 2026-09-09T23:40:50.508Z Record version: sha256:cd707a4874f982d858c82e8a52d428d355cd80263c877b1e615597d94eb4b615 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/323/30/#25-recognition) SEC content: no ##### [323-30-25-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:50.508Z to 2026-09-09T23:40:50.508Z Record version: sha256:89a474ccf6c6e39fed9728cd7c25926cbefd3ae5ec8faba6df3713da766b9bc5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Investors in unincorporated entities such as partnerships and other unincorporated joint ventures generally shall account for their investments using the equity method of accounting by analogy to Subtopic 323-10 if the [investor](https://asc.understandingaccounting.org/glossary/i/#investor "A business entity that holds an investment in voting stock of another entity.") has 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 the [investee](https://asc.understandingaccounting.org/glossary/i/#investee "An entity that issued an equity instrument that is held by an investor."). ##### [323-30-25-2](https://asc.understandingaccounting.org/asc/323/30/#323-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:50.508Z to 2026-09-09T23:40:50.508Z Record version: sha256:2bb7d7d72f1c69dd1d013754aa0fc9c98c1d6fb07749560a0cc038a4c3365306 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The elimination of intra-entity profits and the accounting for income taxes as provided for in paragraph [323-10-35-7](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-7) shall also apply to unincorporated joint ventures. Source downloaded (UTC): 2026-09-09T23:40:52.559Z to 2026-09-09T23:40:52.559Z Record version: sha256:f903e18cf98e6a943e2dcb9517773fdb1aaa0e5f09beb3b148b74bd7338ed79d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/323/30/#35-subsequent-measurement) SEC content: no #### Partnership Profits and Losses ##### [323-30-35-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:52.559Z to 2026-09-09T23:40:52.559Z Record version: sha256:5d4299ada0120fe2ee0b644acfcd778427c79ffbfed41769e0c1a50e7f88ee87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Partnership profits and losses accrued by investor-partners generally shall be reflected in their financial statements as described in paragraphs [323-10-45-1 through 45-2](https://asc.understandingaccounting.org/asc/323/10/#323-10-45-1) , respectively. ##### [323-30-35-2](https://asc.understandingaccounting.org/asc/323/30/#323-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:52.559Z to 2026-09-09T23:40:52.559Z Record version: sha256:378a7299ec2a97fb7d967b77205957cb049297051d1fc0c7ee7a6ac18bf8a285 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Likewise, most of the other provisions of Section 323-10-35 would be appropriate in accounting for a partnership interest, such as the elimination of intra-entity profits and losses (see paragraph [323-10-35-7](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-7)). However, income taxes shall be provided on the profits accrued by investor-partners regardless of the tax basis employed in the partnership return. The tax liabilities applicable to partnership interests relate directly to the partners, and the accounting for income taxes generally contemplated by Topic 740 is appropriate. #### Investment in a Limited Liability Company ##### [323-30-35-3](https://asc.understandingaccounting.org/asc/323/30/#323-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:52.559Z to 2026-09-09T23:40:52.559Z Record version: sha256:e5e645c1c7a67cdc68d5516901f08b85c3c1c5689875341fe6697a081a7903a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment in a limited liability company that maintains a specific ownership account for each investor—similar to a partnership capital account structure—shall be viewed as similar to an investment in a limited partnership for purposes of determining whether a noncontrolling investment in a limited liability company shall be accounted for in accordance with the guidance in Topic 321 or the equity method. #### Discontinuance of the Equity Method ##### [323-30-35-4](https://asc.understandingaccounting.org/asc/323/30/#323-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:52.559Z to 2026-09-09T23:40:52.559Z Record version: sha256:0ae7e5c1ad18cc8d9f1745b100f2bd3b1f7916c496784e128010fee4f1528a22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [323-10-35-39](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-39) provides guidance on discontinuance of the equity method for a limited partnership because the conditions in paragraph [970-323-25-6](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-6) are met. Source downloaded (UTC): 2026-09-09T23:40:55.235Z to 2026-09-09T23:40:55.235Z Record version: sha256:d6f12d89d75a10c814074e03cae0a67a99ab6a6e661c4b81cfc2db42db193a01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/323/30/#60-relationships) SEC content: no #### Receivables ##### [323-30-60-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:55.235Z to 2026-09-09T23:40:55.235Z Record version: sha256:f0b09d57e4cb93595b9a02d3fcfd0cb185a303bb50a68ce35920a3b394b9ed4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on accounting for an acquisition, development, and construction arrangement, see the [Acquisition, Development, and Construction Arrangements Subsection](https://asc.understandingaccounting.org/asc/310/10/#25-recognition) of Section 310-10-25. ##### [323-30-60-2](https://asc.understandingaccounting.org/asc/323/30/#323-30-60-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:55.235Z to 2026-09-09T23:40:55.235Z Record version: sha256:935272efce1d09fc25ecebb32a424340baa1a034bead61e03f9c8cbb4c67cfa2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2016-01](https://asc.understandingaccounting.org/updates/asu-2016-01/). #### Real Estate—General ##### [323-30-60-3](https://asc.understandingaccounting.org/asc/323/30/#323-30-60-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:55.235Z to 2026-09-09T23:40:55.235Z Record version: sha256:494b5daa71cc78f6a255c4b2e5d0897782d7b53f00758b6329d8f69c162ec2b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on an investment in real estate or real estate development projects in a form that otherwise would be within the scope of this Subtopic, see Subtopic 970-323. #### Collaborative Arrangements ##### [323-30-60-4](https://asc.understandingaccounting.org/asc/323/30/#323-30-60-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:55.235Z to 2026-09-09T23:40:55.235Z Record version: sha256:0a7311508d63a4bb8b8c8cb69d63cbbb88e493663273b3d790324bd3821dbcbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on collaborative arrangements, see Topic 808. Source downloaded (UTC): 2026-09-09T23:40:58.938Z to 2026-09-09T23:40:58.938Z Record version: sha256:5e8f17d4ba7ebabed6965bdb444b250608f8a72d43fe74f6c0ea9f7f65726f5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/323/30/#sec-00-status) SEC content: yes ##### [323-30-S00-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-S00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:40:58.938Z to 2026-09-09T23:40:58.938Z Record version: sha256:c772d6976e4da17946824f074e8995239d7d0aaa7c2063812c93398b28fff102 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
323-30-S99-1AmendedAccounting Standards Update No. 2010-0401/15/2010
Source downloaded (UTC): 2026-09-09T23:41:02.617Z to 2026-09-09T23:41:02.617Z Record version: sha256:d8b85e0b6d5a2edd356444af3b03c5fbe6b8cc2f4e8ac6d00442acbc19def663 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-S55: SEC 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/323/30/#sec-55-implementation-guidance-and-illustrations) SEC content: yes #### Accounting for Limited Partnership Investments ##### [323-30-S55-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-S55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:41:02.617Z to 2026-09-09T23:41:02.617Z Record version: sha256:50e260cf365416bd31a2abe71f551878064f2fbc136112783dfccbdc93a252d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [323-30-S99-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-S99-1), SEC Staff Announcement: Accounting for Limited Partnership Investments, for SEC Staff views on when a limited partner may have "so minor" an interest that the equity method would not be required. Source downloaded (UTC): 2026-09-09T23:41:05.466Z to 2026-09-09T23:41:05.466Z Record version: sha256:8be8ab8a337c97f2a9ed4da1bc4a15aaefcd1138f64b19876ee77f7246cc6d8f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-30-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/323/30/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [323-30-S99-1](https://asc.understandingaccounting.org/asc/323/30/#323-30-S99-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:41:05.466Z to 2026-09-09T23:41:05.466Z Record version: sha256:2108c09e599587101d9a4ed9db85f41c5b1247f7b71c76b34601832c387e9d42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-6). 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.