{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/325/20/","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","number":"325-20","topic":"325","title":"Cost Method Investments","area":"Assets","paragraphs":27,"summary":"ASC 325-20 formerly governed the cost method of accounting for equity securities without a readily determinable fair value (cost-method investments), including their initial measurement, impairment assessment, and disclosure. Every substantive paragraph in the subtopic was superseded by ASU 2016-01, so the subtopic is now an empty shell with no operative guidance. Equity investments previously accounted for under the cost method are now within the scope of ASC 321, Investments—Equity Securities.","concepts":["cost method investments","equity securities without a readily determinable fair value","superseded guidance","measurement alternative","other-than-temporary impairment","legacy gaap"],"categories":["Financial instruments","Subsequent measurement","Impairment","Transition and effective dates"],"level":"intermediate","topic_title":"Investments—Other","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"325-20-00-1","para":"00-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">The following table identifies the changes made to this Subtopic.</div> <div class=\"norm-text\"> <table class=\"asc-table\" id=\"SL29646538-161567\"> <tr> <td class=\"entry\"> <strong class=\"ph b\">Paragraph</strong> </td> <td class=\"entry\"> <strong class=\"ph b\">Action</strong> </td> <td class=\"entry\"> <strong class=\"ph b\">Accounting Standards Update</strong> </td> <td class=\"entry\"> <strong class=\"ph b\">Date</strong> </td> </tr> <tr> <td class=\"entry\"></td> <td class=\"entry\"></td> <td class=\"entry\"></td> <td class=\"entry\"></td> </tr> <tr> <td class=\"entry\"> <strong class=\"ph b\">Publicly Traded Company</strong> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"></td> <td class=\"entry\"></td> <td class=\"entry\"></td> <td class=\"entry\"></td> </tr> <tr> <td class=\"entry\"> <div class=\"xref-range displayInline\"><a href=\"/asc/325/20/#325-20-05-1\" class=\"xref\">325-20-05-1 through 05-3</a></div> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-15-1\" class=\"xref\">325-20-15-1</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-15-2\" class=\"xref\">325-20-15-2</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-25-1\" class=\"xref\">325-20-25-1</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-25-2\" class=\"xref\">325-20-25-2</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-25-2\" class=\"xref\">325-20-25-2</a> </td> <td class=\"entry\">Amended</td> <td class=\"entry\"> <a href=\"/updates/asu-2012-04/\" class=\"xref\">Accounting Standards Update No. 2012-04</a> </td> <td class=\"entry\">10/01/2012</td> </tr> <tr> <td class=\"entry\"> <div class=\"xref-range displayInline\"><a href=\"/asc/325/20/#325-20-30-1\" class=\"xref\">325-20-30-1 through 30-6</a></div> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <div class=\"xref-range displayInline\"><a href=\"/asc/325/20/#325-20-35-1\" class=\"xref\">325-20-35-1 through 35-6</a></div> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-35-1A\" class=\"xref\">325-20-35-1A</a> </td> <td class=\"entry\">Amended</td> <td class=\"entry\"> <a href=\"/updates/asu-2012-04/\" class=\"xref\">Accounting Standards Update No. 2012-04</a> </td> <td class=\"entry\">10/01/2012</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-50-1\" class=\"xref\">325-20-50-1</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> <tr> <td class=\"entry\"> <a href=\"/asc/325/20/#325-20-60-1\" class=\"xref\">325-20-60-1</a> </td> <td class=\"entry\">Superseded</td> <td class=\"entry\"> <a href=\"/updates/asu-2016-01/\" class=\"xref\">Accounting Standards Update No. 2016-01</a> </td> <td class=\"entry\">01/05/2016</td> </tr> </table> </div> </div>","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nPublicly Traded Company | Superseded | Accounting Standards Update No. 2016-01 | 01/05/2…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9e0d8684c87e0802a6b885ccf5ddffc37ad1fe9ddb3df18e1168d443456fcf4","downloaded_from":"2026-09-09T23:43:27.068Z","last_downloaded_at":"2026-09-09T23:43:27.068Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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Every substantive paragraph in the subtopic was superseded by ASU 2016-01, so the subtopic is now an empty shell with no operative guidance. Equity investments previously accounted for under the cost method are now within the scope of ASC 321, Investments—Equity Securities.","key_points":["All of the overview (325-20-05), scope (325-20-15), recognition (325-20-25), initial measurement (325-20-30), subsequent measurement/impairment (325-20-35), and disclosure (325-20-50) paragraphs were superseded by Accounting Standards Update No. 2016-01, leaving no effective guidance in this subtopic.","Because 325-20 is superseded, the cost method for equity securities without a readily determinable fair value is no longer available under U.S. GAAP.","Equity investments formerly covered by this subtopic are accounted for under ASC 321, generally at fair value with changes recognized in net income, subject to the measurement alternative (cost less impairment, adjusted for observable price changes).","Impairment of such investments is now evaluated under ASC 321's qualitative impairment model rather than the former other-than-temporary impairment analysis in 325-20-35.","Paragraphs 325-20-05-4, 325-20-25-3, 325-20-30-7, and 325-20-40-1 are designated 'not used,' confirming the subtopic retains only placeholder text.","Any pre-2016-01 reference to a 'cost-method investment' under 325-20 should be treated as superseded legacy guidance when reading older financial statements."],"categories":["Financial instruments","Subsequent measurement","Impairment","Transition and effective dates"],"audience_level":"intermediate","student_note":"This subtopic matters mainly as a historical marker: exam questions and older filings may reference the \"cost method,\" but ASU 2016-01 eliminated it and moved these investments to ASC 321. The common misunderstanding is assuming cost-method accounting still exists for private-company equity holdings; the correct answer is fair value under ASC 321 or its measurement alternative.","related_topics":["321","321-10","320","323","825","820"],"key_concepts":["cost method investments","equity securities without a readily determinable fair value","superseded guidance","measurement alternative","other-than-temporary impairment","legacy gaap"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e249009c86975216f66fa22fbb35a9d0a70124814496a080f336d7dcf2e9dc5","downloaded_from":"2026-09-09T23:43:27.068Z","last_downloaded_at":"2026-09-09T23:43:52.504Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"325-944","title":"Financial 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