: The equity method is used when an investor can influence the operating and financial policies of an investee.
Investments—Equity Method and Joint Ventures (Topic 323) - FASB 323 mp4
: Generally, an ownership interest of 20% to 50% of voting stock is presumed to provide significant influence. : The equity method is used when an
: This update allows entities to use the proportional amortization method for equity investments made primarily for income tax credits (e.g., affordable housing projects), providing a more consistent accounting treatment for tax-driven structures. affordable housing projects)
: Simplified the transition to the equity method by eliminating the requirement to retroactively apply the method when an increase in ownership triggers a change from cost-basis accounting. Reporting and Disclosure Requirements Under ASC 323-10-50 , investors must disclose: