vestments in Equity of Other Entities

1. Investments in equity securities that have (A)

(A) readily determinable fair value

--> Apply asc topic 320: Investments - Debt and Equity Securities

--> SFAS 115

2. Investments in common stock of subsidiaries

--> Apply asc topic 810: Consolidation

--> ARB 51, SFAS 160

3. Investments in common stock with significant influence

--> Apply asc topic 323-10: Investments - Equity Method and Joint Ventures

--> APB 18

4. Investments in partnerships, unincorporated joint ventures, limited liability companies

--> Apply asc topic 323-30: Partnerships, Joint Ventures, Limited Liability Entities

--> AICPA Accounting Interpretation (AIN) APB 18

5. Investments in common stock other than previous cases

--> Apply asc topic 325-20: Cost Method Investments

--> APB 18

6. Fair value option

--> ASC 825 Financial Instruments: Fair Value Option (FVO)

--> SFAS 159: FVO for financial assets and financial liabilities, ASC 825

--> SFAS 156: FVO for servicing assets and servicing liabilities, ASC 860

--> SFAS 155: FVO for hybrid instruments, ASC 815

--> SFAS 157: Fair Value Measurements, ASC 820

--> SFAS 107: Disclosures about Fair Value of Financial Instruments, ASC 820

Significant Influence

--> 20% or more of the voting rights of an investee

--> Investee is not a subsidiary or a controlled entity

Initial measurement under equity method

--> investments are measured at cost

Subsequent measurement under equity method

1. Investor's share of (B)

--> is recognized in the investor's financial statements

(B) Earnings or losses of an investee

2. Investor's share of (C)

--> adjusts the investor's other comprehensive income

(C) Other comprehensive income

3. Investor's share of (B) and (C)

--> adjusts the carrying amount of the investor's investment

Equity method losses

Investor's share of losses of an investee

--> is recognized up to

--> the carrying amount of the investor's investment

Equity method goodwill: Basis difference

1. If investment cost > investor's share of net assets

--> the difference between two

--> is recognized as "equity method goodwill"

2. Equity method goodwill is not amortized.

3. Impairment test for goodwill, SFAS 142,

--> is not applied to "equity method goodwill"

4. Equity method goodwill is impaired

--> if a decrease in value is "other than temporary"

Impairment of equity method investment

If a decrease in (D) is "other than temporary"

--> recognize such a decrease

--> beyond the amount normally recognized by equity method, i.e., current losses
(D) the value of investor's equity method investment