equity security

Assets2

1. 321-10Overall321 Investments—Equity Securities

   ASC 321-10 governs the accounting for investments in equity securities and other ownership interests (partnerships, unincorporated joint ventures, LLCs) that are not consolidated, not accounted for under the equity method, and not derivatives. The default rule is fair value measurement in the balance sheet with all unrealized holding gains and losses (and dividend income) recognized in earnings (321-10-35-1, 35-6). As an alternative, an entity may elect, investment by investment, a "measurement alternative" for an equity security without a readily determinable fair value: cost minus impairment, adjusted up or down for observable price changes in orderly transactions for identical or similar investments of the same issuer (321-10-35-2).

2. 321-958Not-for-Profit Entities321 Investments—Equity Securities

   This subtopic (codified as 958-321) sets the incremental rules for how not-for-profit entities account for investments in equity securities and other ownership interests, layering on top of the general guidance in Topic 321. Equity securities purchased are initially measured at acquisition cost excluding brokerage and transaction fees; those received as contributions or through agency transactions are initially measured at fair value, with subsequent measurement following Topic 321. Investments held by an NFP as agent with little or no discretion over use of the income and gains are reported as agency transactions—changes in assets and liabilities, not changes in net assets.