FASB
New guidance clarifies investment company status
determination and accounting
The FASB has issued Accounting Standards Update (ASU) 2013-08,
Financial Services – Investment Companies: Amendments to
the Scope, Measurement, and Disclosure Requirements, with a
threefold intent:
- To provide a two-tiered approach to assess whether a public or
private company is an investment company
- To address accounting by an investment company for
noncontrolling interests in other investment companies
- To require certain additional disclosures
The ASU clarifies that an entity subject to regulation under the
Investment Company Act of 1940 is considered an investment company
under U.S. GAAP, while all other entities should consider their
purpose and design, and assess their individual characteristics to
make that determination. After making the initial determination of
investment company status, an entity should then reassess its
status based on certain future events.
