# ASC 323-740-30: Investments—Equity Method and Joint Ventures — Income Taxes—Proportional Amortization Method — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

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## ASC 323-740-30: 30 Initial Measurement

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### Proportional Amortization Method

##### [323-740-30-1](https://asc.understandingaccounting.org/asc/323/740/#323-740-30-1)

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Paragraph [323-740-25-5](https://asc.understandingaccounting.org/asc/323/740/#323-740-25-5) prohibits immediate recognition of income tax credits, at the time of initial investment, for the entire benefit of tax credits to be received over a period of time during the term of an investment that generates income tax credits and other income tax benefits from a tax credit program (that is, income tax credits shall not be recognized in the financial statements before the year in which the credit arises).

##### [323-740-30-2](https://asc.understandingaccounting.org/asc/323/740/#323-740-30-2)

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Example 1 (see paragraph [323-740-55-2](https://asc.understandingaccounting.org/asc/323/740/#323-740-55-2)) illustrates the application of the proportional amortization method to a limited partnership investment that generates income tax credits and other income tax benefits from a tax credit program. Example 2 (see paragraph [323-740-55-11](https://asc.understandingaccounting.org/asc/323/740/#323-740-55-11)) illustrates the application of the proportional amortization method to a limited partnership investment that generates income tax credits, other income tax benefits, and non-income-tax-related benefits from a tax credit program.