# ASC 323-740-45: Investments—Equity Method and Joint Ventures — Income Taxes—Proportional Amortization Method — 45 Other Presentation Matters

Source: FASB Accounting Standards Codification, Basic View

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## ASC 323-740-45: 45 Other Presentation Matters

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### Proportional Amortization Method

##### [323-740-45-1](https://asc.understandingaccounting.org/asc/323/740/#323-740-45-1)

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This guidance addresses the income statement presentation of an investment that is accounted for using the proportional amortization method.

##### [323-740-45-2](https://asc.understandingaccounting.org/asc/323/740/#323-740-45-2)

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Under the proportional amortization method, the amortization of the investment in the limited liability entity is recognized in the income statement as a component of [income tax expense (or benefit)](https://asc.understandingaccounting.org/glossary/i/#income-tax-expense-or-benefit "The sum of current tax expense (or benefit) and deferred tax expense (or benefit)."). The [current tax expense (or benefit)](https://asc.understandingaccounting.org/glossary/c/#current-tax-expense-or-benefit "The amount of income taxes paid or payable (or refundable) for a year as determined by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues for that year.") shall be accounted for pursuant to the general requirements of Topic 740.

##### [323-740-45-3](https://asc.understandingaccounting.org/asc/323/740/#323-740-45-3)

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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.