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The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Investment Company Superseded Accounting Standards Update No. 2013-08 06/07/2013
Related Parties Superseded Accounting Standards Update No. 2013-08 06/07/2013
946-810-05-1 Amended Accounting Standards Update No. 2013-08 06/07/2013
946-810-15-1 Amended Accounting Standards Update No. 2013-08 06/07/2013
946-810-15-2 Superseded Accounting Standards Update No. 2013-08 06/07/2013
946-810-45-1 Superseded Accounting Standards Update No. 2013-08 06/07/2013
946-810-45-2 Amended Accounting Standards Update No. 2013-08 06/07/2013
946-810-45-3 Amended Accounting Standards Update No. 2013-08 06/07/2013
946-810-45-4 through 45-24 Superseded Accounting Standards Update No. 2013-08 06/07/2013
946-810-50-1 through 50-4 Superseded Accounting Standards Update No. 2013-08 06/07/2013
946-810-55-1 through 55-12 Superseded Accounting Standards Update No. 2013-08 06/07/2013
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This Subtopic provides guidance on the application of consolidation guidance in Topic 810 by an investment company.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 946-10-15.
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Except as discussed in the following paragraph, consolidation by an investment company of an investee that is not an investment company is not appropriate. Rather, those controlling financial 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.
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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). 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 controlling financial interest in such an operating entity, the investment company should consolidate that investee, rather than measuring the investment at fair value.
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The general rule: an investment company does not consolidate an investee that is not itself an investment company, even if it holds a controlling financial interest; instead that interest is measured at fair value under Subtopic 946-320. The one exception is a controlling financial interest in an operating entity that provides services to the investment company (e.g., an investment adviser or transfer agent), which must be consolidated.","key_points":["Consolidation by an investment company of an investee that is not an investment company is not appropriate; the controlling financial interest is instead measured at fair value under Subtopic 946-320 (810-946-45-2).","Investments in debt and equity securities held by an investment company are subsequently measured at fair value rather than consolidated (810-946-45-2).","Exception: if an investment company holds a controlling financial interest in an operating entity that provides services to it (investment adviser, transfer agent), it must consolidate that investee rather than carry it at fair value (810-946-45-3; see 946-10-55-5).","The rationale for the exception is that the purpose of such an investment is to obtain services, not to realize a gain on sale of the investment (810-946-45-3).","Scope follows the Overall Subtopic scope for investment companies in Section 946-10-15 (810-946-15-1).","Much of the former guidance (presentation paragraphs 45-4 through 45-24, disclosures 50-1 through 50-4, and implementation guidance 55-1 through 55-12) was superseded by ASU 2013-08."],"categories":["Consolidation","Fair value","Industry-specific","Subsequent measurement"],"audience_level":"intermediate","student_note":"Exam trap: control normally forces consolidation, but investment companies are the classic carve-out — a majority-owned portfolio company stays at fair value. Remember the flip side: a controlled service provider (adviser, transfer agent) IS consolidated because the investment exists to provide services, not investment returns.","related_topics":["946-10","946-320","810-10","820"],"key_concepts":["investment company","controlling financial interest","consolidation exception","fair value measurement of investments","operating entity providing services","investment adviser","transfer agent"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f78c037384f0627f909ef33e6c818d3b75d16107bac2636d11ea42789350b1af","downloaded_from":"2026-09-10T01:32:06.472Z","last_downloaded_at":"2026-09-10T01:32:24.826Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"323-946","title":"Financial Services—Investment 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