ASC

ASC 810-940

Financial Services—Brokers and Dealers

810 Consolidation

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In brief

IntermediateConsolidationIndustry-specificPresentation

This Subtopic gives the industry-specific consolidation guidance for brokers and dealers in securities. Its single substantive rule is a presentation exception: a broker-dealer parent within the scope of Topic 940 does not consolidate a majority-owned subsidiary in which it has a controlling financial interest (and that is not a variable interest entity) when control is likely to be temporary (810-940-45-1, cross-referencing 810-10-15-10(a)(2)).

Key points (5)
  • The Subtopic addresses consolidation by brokers and dealers in securities (810-940-05-1).
  • Scope follows the Overall broker-dealer Subtopic, Section 940-10-15 (810-940-15-1).
  • Under 810-940-45-1 (citing 810-10-15-10(a)(2)), a majority-owned entity in which a broker-dealer parent has a controlling financial interest is not consolidated if control is likely to be temporary.
  • The temporary-control exception applies only to entities outside the scope of the Variable Interest Entities Subsections of Section 810-10-15; VIEs are still evaluated under the VIE model.
  • The exception is available only to a parent that is itself a broker-dealer within the scope of Topic 940.

For students. Exam questions often test the narrow "control is likely to be temporary" exception—remember it is limited to broker-dealer parents under Topic 940 and to non-VIEs; a common error is assuming any parent can avoid consolidation because control is short-lived.

broker-dealercontrolling financial interestmajority-owned subsidiarytemporary controlconsolidation exceptionvariable interest entity

Machine-generated study aid for ASC 810-940. Check the source paragraphs below.

810-940-00Status

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810-940-00-1
No updates have been made to this subtopic.

810-940-05Overview and Background

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810-940-05-1
This Subtopic addresses consolidation by brokers and dealers in securities (broker-dealers).

810-940-15Scope and Scope Exceptions

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Overall Guidance

810-940-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15.

810-940-45Other Presentation Matters

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810-940-45-1
Paragraph 810-10-15-10(a)(2) states that a majority-owned entity that is not in the scope of the Variable Interest Entities Subsection of Section 810-10-15 and in which a parent has a controlling financial interest shall not be consolidated if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary.

810-940-S40DerecognitionSEC

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Certain Transfers of Nonperforming Assets

810-940-S40-1
See paragraph 942-810-S99-1, SAB Topic 5.V, for SEC Staff views on accounting for certain transfers of nonperforming assets.

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