# ASC 946-10-15: Financial Services—Investment Companies — Overall — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/946/10/#15-scope-and-scope-exceptions) 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): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:ce4d3c5f28b6859abc67b1edae48dfc38107a199ea3a37dae8737fa10a1b3250 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 946-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/946/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [946-10-15-1](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:186fdd05d3d030d1a11e4c308684f686020fcbbe16175ed99ee51177df6eba4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Financial Services—Investment Companies Topic only provides incremental industry-specific guidance for the entities that meet the assessment of investment company status described in this Scope Section, with the exception of Subtopic 946-605, which has its own discrete scope. Entities within the scope of this Topic also shall comply with the applicable guidance not included in this Topic. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Financial Services—Investment Companies Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Financial Services—Investment Companies Topic, with the exception of Subtopic 946-605. #### Entities ##### [946-10-15-2](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:85da428719cbf8f531850a7c3ff20be96d53926e62d0e4f808605e57cbca4990 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accounting principles discussed in this Topic apply to all investment companies. An investment company as discussed in this Topic is an entity that meets the assessment described in paragraphs [946-10-15-4 through 15-9](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-4) . 1. a [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 3. c [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). ##### [946-10-15-3](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:7b56c958f54fc8741c6410ea9696f4d098d874fd8b2f466aef3fd6862ba431b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to real estate investment trusts. ##### [946-10-15-4](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:7cdc19aceb80d2e6458f9e553be88acbf16b472fcfb2ded0f5f0b346bbf6fe2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity regulated under the Investment Company Act of 1940 is an investment company under this Topic. ##### [946-10-15-5](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:c2b1cd322ac329714e343bf55db530ee32c7e26eca220a07c800f4260fefaee0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that is not regulated under the Investment Company Act of 1940 shall assess all the characteristics of an investment company in paragraphs [946-10-15-6 through 15-7](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-6) to determine whether it is an investment company. The entity shall consider its purpose and design when making that assessment. ##### [946-10-15-6](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:ae423181411eec9cd35d8d585ff318eb667d2b7edb8bfa409d549d48fbe9f777 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company has the following fundamental characteristics: 1. a It is an entity that does both of the following: 1. 1 Obtains funds from one or more investors and provides the investor(s) with investment management services 2. 2 Commits to its investor(s) that its business purpose and only substantive activities are investing the funds solely for returns from capital appreciation, investment income, or both. 2. b The entity or its [affiliates](https://asc.understandingaccounting.org/glossary/a/#affiliate "A party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an entity. See Control.") do not obtain or have the objective of obtaining returns or benefits from an investee or its affiliates that are not normally attributable to ownership interests or that are other than capital appreciation or investment income. ##### [946-10-15-7](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:729fe5100cc8d1e1d16008a7b6e2944085a766b14a215285caa08287f929700e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An investment company also has the following typical characteristics: 1. a It has more than one investment. 2. b It has more than one investor. 3. c It has investors that are not [related parties](https://asc.understandingaccounting.org/glossary/r/#related-parties "Related parties include: Affiliates of the entity Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management Principal owners of the entity and members of their immediate families Management of the entity and members of their immediate families Other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.") of the [parent](https://asc.understandingaccounting.org/glossary/p/#parent "An entity that has a controlling financial interest in one or more subsidiaries. (Also, an entity that is the primary beneficiary of a variable interest entity.)") (if there is a parent) or the investment manager. 4. d It has ownership interests in the form of equity or partnership interests. 5. e It manages substantially all of its investments on a [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.") basis. ##### [946-10-15-8](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:c2e9b3dd69501e9237f1aced50feb18d05e944c7f97010105fdc33f92468acbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To be an investment company, an entity shall possess the fundamental characteristics in paragraph [946-10-15-6](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-6). Typically, an investment company also has all of the characteristics in paragraph [946-10-15-7](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-7). However, the absence of one or more of those typical characteristics does not necessarily preclude an entity from being an investment company. If an entity does not possess one or more of the typical characteristics, it shall apply judgment and determine, considering all facts and circumstances, how its activities continue to be consistent (or are not consistent) with those of an investment company. ##### [946-10-15-9](https://asc.understandingaccounting.org/asc/946/10/#946-10-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:18:51.337Z to 2026-09-10T02:18:51.337Z Record version: sha256:3a1111e7309e67e60950e0740a030e9998f90e95f6e08ad621525fb78ff27686 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The implementation guidance in Section 946-10-55 is an integral part of assessing investment company status and provides additional guidance for that assessment.