consolidation exception

Broad Transactions2

1. 810-940Financial Services—Brokers and Dealers810 Consolidation

   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)).

2. 810-946Financial Services—Investment Companies810 Consolidation

   This Subtopic tells an investment company (as defined in Topic 946) when consolidation applies. 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.