# ASC 323-946-45: Investments—Equity Method and Joint Ventures — Financial Services—Investment Companies — 45 Other Presentation Matters

Source: FASB Accounting Standards Codification, Basic View

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## ASC 323-946-45: 45 Other Presentation Matters

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#### Application of the Equity Method

##### [323-946-45-1](https://asc.understandingaccounting.org/asc/323/946/#323-946-45-1)

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Except as discussed in the following paragraph, use of the equity method of accounting by an investment company is not appropriate. Rather, those noncontrolling ownership interests held by an investment company shall be measured in accordance with guidance in Subtopic 946-320, which requires investments in debt and equity securities to be subsequently measured at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.").

##### [323-946-45-2](https://asc.understandingaccounting.org/asc/323/946/#323-946-45-2)

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An exception to the general principle in the preceding paragraph occurs if the investment company has an investment in an operating entity that provides services to the investment company, for example, an investment adviser or transfer agent (see paragraph [946-10-55-5](https://asc.understandingaccounting.org/asc/946/10/#946-10-55-5)). In those cases, the purpose of the investment is to provide services to the investment company rather than to realize a gain on the sale of the investment. If an investment company holds a noncontrolling ownership interest in such an operating entity that otherwise qualifies for use of the equity method of accounting, the investment company should use the equity method of accounting for that investment, rather than measuring the investment at fair value.

##### [323-946-45-3](https://asc.understandingaccounting.org/asc/323/946/#323-946-45-3)

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[Paragraphs 946-323-45-3 through 45-18 superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/asc/323/946/#323-946-45-3).