# ASC 323-970-25: Investments—Equity Method and Joint Ventures — Real Estate—General — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/323/970/#25-recognition) 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): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:e5d5789cab4deaf42e4cd5d0b7d1723b67f39928fa3ec450bae0c5bc7927d2ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 323-970-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/323/970/#25-recognition) SEC content: no ##### [323-970-25-1](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:895a9dcfa68515a85e7332a9719242be5227207982f2821e306b42c3060dab4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### General Partnerships ##### [323-970-25-2](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:2ce708ad6258efb597da0553542531678657dbce7b7f8563f229069ddcb9c89c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [970-810-25-2](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-2) states that a noncontrolling investor in a [general partnership](https://asc.understandingaccounting.org/glossary/g/#general-partnership "An association in which each partner has unlimited liability.") shall account for its investment by the equity method and should be guided by the provisions of Topic 323. ##### [323-970-25-3](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:3ad17f421ec9c797aa81dd9691fcb7504b19d7a2c4352c58a074e53b0d73b979 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many provisions of Topic 323 are appropriate in accounting for investments in certain unincorporated entities. The principal difference, aside from income tax considerations, between corporate joint ventures and general partnerships is that the individual investors in general partnerships usually assume joint and several liability. The equity method, however, enables noncontrolling investors in general partnerships to reflect the underlying nature of their investments in those ventures as well as it does for investors in corporate joint ventures. Accordingly, investments in noncontrolled real estate general partnerships shall be accounted for and reported under the equity method. ##### [323-970-25-4](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:e3b292f44e1ce2c9e2e5ddb2f2bbb78b9841c3918f33fd385ef88b4680919836 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall apply the one-line equity method of presentation in both the balance sheet and the statement of income. Pro rata consolidation is not appropriate except in the limited circumstances described in paragraph [810-10-45-14](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-14). Topic 323 shall be used as a guide in applying the equity method. #### Limited Partnerships ##### [323-970-25-5](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:55610b6deb026c059a27b12d583aa35fa580ab857053b80904012e467bc115ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on determining whether a general partner or a limited partner shall consolidate a [limited partnership](https://asc.understandingaccounting.org/glossary/l/#limited-partnership "An association in which one or more general partners have unlimited liability and one or more partners have limited liability. A limited partnership is usually managed by the general partner or partners, subject to limitations, if any, imposed by the partnership agreement.") or apply the equity method of accounting to its interests in the limited partnership, see paragraph [970-810-25-3](https://asc.understandingaccounting.org/asc/810/970/#810-970-25-3). ##### [323-970-25-6](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:be4a31a965249e427671d16f38e01d405aeb5b324b87aad548b65e951172bfa8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The equity method of accounting for investments in general partnerships is generally appropriate for accounting by limited partners for their investments in limited partnerships. A limited partner's interest may be so minor that the limited partner may have virtually no influence over partnership operating and financial policies. Such a limited partner is, in substance, in the same position with respect to the investment as an investor that owns a minor common stock interest in a corporation, and, accordingly, the limited partner should account for its investment in accordance with Topic 321. ##### [323-970-25-7](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:012e012cb5c8819d00eb97c09da0f75312ea412996bf226f36b0526df19cbb36 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/). ##### [323-970-25-8](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:206cbfce1dc8d7b9805e2fefd3a9b94908832ab2cbbb20bc360241d663b632f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the substance of the partnership arrangement is such that the general partners are not in control of the major operating and financial policies of the partnership, a limited partner may be in control. An example could be a limited partner holding over 50 percent of the limited partnership's [kick-out rights](https://asc.understandingaccounting.org/glossary/k/#kick-out-rights-voting-interest-entity-definition "The rights underlying the limited partner's or partners' ability to dissolve (liquidate) the limited partnership or otherwise remove the general partners without cause.") through voting interests in accordance with paragraph [810-10-15-8A](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-8A). A controlling limited partner shall be guided in accounting for its investment by the principles for investments in subsidiaries in Topic 810 on consolidation. Noncontrolling limited partners shall account for their investments by the equity method and shall be guided by the provisions of Topic 323, as discussed in the guidance beginning in paragraph [970-323-25-5](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-5), or by the guidance in Topic 321. #### Corporate Joint Ventures ##### [323-970-25-9](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:87633b02349dfd574d1a390a1a34ddeb6688da14808f7e08d72a8635e5f05024 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 323 provides the standards for use of the equity method for [corporate joint ventures](https://asc.understandingaccounting.org/glossary/c/#corporate-joint-venture "A corporation owned and operated by a small group of entities (the joint venturers) as a separate and specific business or project for the mutual benefit of the members of the group. A government may also be a member of the group. The purpose of a corporate joint venture frequently is to share risks and rewards in developing a new market, product or technology; to combine complementary technological knowledge; or to pool resources in developing production or other facilities. A corporate joint venture also usually provides an arrangement under which each joint venturer may participate, directly or indirectly, in the overall management of the joint venture. Joint venturers thus have an interest or relationship other than as passive investors. An entity that is a subsidiary of one of the joint venturers is not a corporate joint venture. The ownership of a corporate joint venture seldom changes, and its stock is usually not traded publicly. A noncontrolling interest held by public ownership, however, does not preclude a corporation from being a corporate joint venture.") and includes guidance for applying that method in the financial statements of the investor. That Topic applies to corporate joint ventures created to own or operate real estate projects. ##### [323-970-25-10](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:052064a79b6b393265ce05ca295194f48ff7bf6cdc5bc466d6f43fa337dafa09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accordingly, an investment in a corporate subsidiary that is a [real estate venture](https://asc.understandingaccounting.org/glossary/r/#real-estate-venture "Any of the following: a joint venture, a general partnership, a limited partnership, and an undivided interest.") shall be accounted for by the investor-parent using the principles applicable to investments in subsidiaries rather than those applicable to investments in corporate joint ventures. ##### [323-970-25-11](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:232986178f1ebbd7d74129bbef7d79b85a39de5f5271c758b905b6550c4dab8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Noncontrolling shareholders in such a real estate venture shall account for their investment using the principles applicable to investments in common stock set forth in Topic 321 or 323. #### Undivided Interests ##### [323-970-25-12](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:ccd31422c8816f64dfd3298982428afd57bcd9ed402b566300837bc1d84204c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If real property owned by undivided interests is subject to [joint control](https://asc.understandingaccounting.org/glossary/j/#joint-control "Occurs if decisions regarding the financing, development, sale, or operations require the approval of two or more of the owners.") by the owners, the investor-venturers shall not present their investments by accounting for their pro rata share of the assets, liabilities, revenues, and expenses of the ventures. Most real estate ventures with ownership in the form of undivided interests are subject to some level of joint control. Accordingly, such investments shall be presented in the same manner as investments in noncontrolled partnerships. #### Acquisition, Development, and Construction Arrangements ##### [323-970-25-13](https://asc.understandingaccounting.org/asc/323/970/#323-970-25-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:42:49.098Z to 2026-09-09T23:42:49.098Z Record version: sha256:5418c791e004aefbd2ab79d31699e144320e12eb01df379734317cd5e631f084 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See the [Acquisition, Development, and Construction Subsection](https://asc.understandingaccounting.org/asc/310/10/#25-recognition) of Section 310-10-25 for a discussion of when [acquisition, development, and construction arrangements](https://asc.understandingaccounting.org/glossary/a/#acquisition-development-and-construction-arrangements "Acquisition, development, or construction arrangements, in which a lender, usually a financial institution, participates in expected residual profit from the sale or refinancing of property.") are required to be accounted for as a real estate joint venture rather than a loan. In those circumstances, the [Acquisition, Development, and Construction Subsection](https://asc.understandingaccounting.org/asc/310/10/#35-subsequent-measurement) of Section 310-10-35, and the [Acquisition, Development, and Construction Subsection](https://asc.understandingaccounting.org/asc/310/10/#40-derecognition) of Section 310-10-40 provide further guidance for accounting for such arrangements.