residual investments topic

Assets14

1. 325-10Overall325 Investments—Other

   ASC 325-10 is the Overall subtopic of Investments—Other, the residual investments Topic in the Codification. It mainly serves as a roadmap: it explains that investment accounting is split across Topics 320 (debt securities), 321 (equity securities), 323 (equity method and joint ventures), and 325 (other investments), and it lists the Subtopics within Topic 325 — Overall, Investments in Insurance Contracts (325-30), and Beneficial Interests in Securitized Financial Assets (325-40). It contains no substantive recognition or measurement guidance of its own.

2. 325-20Cost Method Investments325 Investments—Other

   ASC 325-20 formerly governed the cost method of accounting for equity securities without a readily determinable fair value (cost-method investments), including their initial measurement, impairment assessment, and disclosure. Every substantive paragraph in the subtopic was superseded by ASU 2016-01, so the subtopic is now an empty shell with no operative guidance. Equity investments previously accounted for under the cost method are now within the scope of ASC 321, Investments—Equity Securities.

3. 325-30Investments in Insurance Contracts325 Investments—Other

   ASC 325-30 governs investments in life insurance contracts held by entities that are the owner or beneficiary (e.g., corporate-owned or bank-owned life insurance), and, in separate Subsections, investments in life settlement contracts purchased from policy owners. The general rule is that a life insurance policy is reported as an asset measured at "the amount that could be realized under the insurance contract" at the balance sheet date, determined policy-by-policy (or certificate-by-certificate) and reflecting probable contractual limitations. For life settlement contracts, an investor makes an irrevocable, instrument-by-instrument election between the investment method (cost plus capitalized premiums and direct external costs, subject to impairment) and the fair value method (remeasured each period through earnings).

4. 325-40Beneficial Interests in Securitized Financial Assets325 Investments—Other

   ASC 325-40 governs how a holder recognizes interest income on beneficial interests in securitized financial assets — both a transferor's retained interests in securitizations accounted for as sales under Topic 860 and purchased beneficial interests. The holder measures accretable yield at acquisition as the excess of cash flows expected to be collected (or contractual cash flows, for PCD beneficial interests) over the initial investment (or initial amortized cost basis), and accretes it into interest income using the effective yield method. Expected cash flows must be updated each period; favorable or adverse changes are run first through the credit loss guidance in Topic 326, with any residual change adjusting accretable yield prospectively.

5. 325-905Agriculture325 Investments—Other

   ASC 325-905 governs how agricultural cooperatives account for investments in other cooperatives and how patrons (members) account for their investments in a cooperative. The core rule is that these nonmarketable long-term investments are carried at cost — including allocated equities and per-unit retains recorded at face value — rather than as equity securities, with the equity method of ASC 323-10 applied only in the infrequent case where the investor's share of the investee cooperative's unallocated retained earnings is material. Carrying amounts must be written down when the patron cannot recover full carrying value, and undistributed retains are classified as noncurrent.

6. 325-940Financial Services—Brokers and Dealers325 Investments—Other

   This subtopic tells broker-dealers in securities how to account for equity investments or financing they provide to another entity as part of a financial-restructuring transaction, including investments made through a "bridge entity" formed to pool funds from several sources. Such investments (and related receivables and debt and equity securities) are measured initially at fair value (325-940-30-1) and subsequently at fair value (325-940-35-1). Consolidation of majority-owned investees is addressed by the broker-dealer consolidation guidance in 940-810-45-1.

7. 325-942Financial Services—Depository and Lending325 Investments—Other

   This Subtopic gives depository and lending institutions the recognition and measurement rules for four narrow items: Federal Home Loan Bank (FHLB) and Federal Reserve Bank stock, National Credit Union Share Insurance Fund (NCUSIF) deposits and premiums, regular-way securities trades, and exchange memberships. FHLB/Federal Reserve Bank stock is a restricted investment security carried at cost (no readily determinable fair value; redeemable only at $100 par) and tested for impairment based on ultimate recoverability of par, not temporary declines. NCUSIF deposits are assets only so long as they are fully refundable, and regular-way purchases and sales are recorded on the trade date.

8. 325-944Financial Services—Insurance325 Investments—Other

   ASC 325-944 was the insurance-industry ("Investments—Other, Insurance") guidance within the Investments—Other topic, but every paragraph in the subtopic (Sections 05, 15, 30, 35, 40, 45, and 50) has been superseded by Accounting Standards Update No. 2016-01. As a result, the subtopic contains no operative recognition, measurement, derecognition, presentation, or disclosure requirements. Entities in the insurance industry must instead apply the equity-security and other-investment guidance retained elsewhere, principally ASC 321 and ASC 320 as amended by ASU 2016-01.

9. 325-946Financial Services—Investment Companies325 Investments—Other

   This subtopic tells an investment company how to account for its "other investments" (investments other than debt and equity securities). Such investments are initially measured at transaction price, including commissions and other charges that are part of the purchase transaction, and are subsequently measured at fair value. Its scope mirrors the investment company Overall Subtopic scope in Section 946-10-15.

10. 325-954Health Care Entities325 Investments—Other

    This Subtopic governs how health care entities (within the scope of Topic 954) account for investments that are NOT financial instruments — for example, investment real estate or certain oil and gas interests. Such investments are reported at amortized cost and tested for impairment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10. Property held for investment purposes is presented within investments on the balance sheet.

11. 325-958Not-for-Profit Entities325 Investments—Other

    ASC 325-958 governs how not-for-profit entities account for "other investments"—those that are neither debt nor equity securities, derivatives, equity-method or consolidated investees, nor investments held by a financially interrelated entity—such as real estate, non-security mortgage notes, and oil and gas interests. Purchased other investments are initially measured at acquisition cost (including transaction fees) and contributed or agency-acquired ones at fair value. Subsequent measurement depends on the type of NFP: higher education institutions and voluntary health and welfare entities may elect carrying value or fair value, while other NFPs elect fair value or the lower of cost or fair value, applied consistently to all other investments.

12. 325-960Plan Accounting—Defined Benefit Pension Plans325 Investments—Other

    ASC 325-960 (paralleling 960-325) governs how a defined benefit pension plan accounts for and reports its investments and insurance contracts. The core rule is that plan investments—equity and debt securities, real estate, and other assets other than insurance contracts—are presented at fair value at the reporting date, with purchases and sales generally recorded on a trade-date basis; insurance contracts are presented the same way as in the plan's ERISA filing (fair value or contract value). Extensive disclosure is required by general type of investment, including the plan's interest in a master trust.

13. 325-962Plan Accounting—Defined Contribution Pension Plans325 Investments—Other

    ASC 962-325 governs how a defined contribution pension plan reports its investments and insurance contracts. The core rule is that plan investments (including derivatives) are reported at fair value under Topic 820, with two exceptions: fully benefit-responsive investment contracts are reported at contract value, and insurance contracts as defined in Subtopic 944-20 are presented the same way as in the plan's ERISA Form 5500 filing (fair value or contract value). It also prescribes trade-date recording, presentation of investments by general type, master trust disclosures, and disclosures about benefit-responsive contracts.

14. 325-965Plan Accounting—Health and Welfare Benefit Plans325 Investments—Other

    ASC 325-965 (parallel to 965-325) governs how health and welfare benefit plans measure, present, and disclose their investments and insurance contracts. The core rule is that plan investments are reported at fair value less costs to sell, if significant, at the financial statement date, except that insurance contracts are presented as reported in the plan's ERISA Form 5500 filing (fair value or contract value) and fully benefit-responsive investment contracts of defined contribution plans are measured at contract value. Presentation is by general type of investment, with specified disclosures for benefit-responsive contracts and for plan interests in master trusts.