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HOME  |  ARCHIVE  |  CONTACT  |  ADVERTISE  |  SUBSCRIBE  |  AICPA   Online Issues  >  February 2001  > Applications in Accounting APPLICATIONS IN ACCOUNTING Some users may apply AcSEC’s proposed SOP to investments other than real estate. The Who and How of the Equity Accounting Method BY MARC SIMON he AICPA issued an exposure draft of a statement of position that would change how investors account in GAAP financial statements for certain interests in unconsolidated investments. AcSEC issued the ED, Accounting for Investors’ Interests in Unconsolidated Real Estate Investments, in November 2000. The proposed SOP focuses on who should apply the equity method of accounting to unconsolidated real estate investments and how they should do so. It would supersede SOP 78-9, Accounting for Investments in Real Estate Ventures. Because users applied SOP 78-9 more broadly to investments other than real estate, those interested in accounting for investors’ interests in unconsolidated investments other than real estate also may want to comment on the proposed SOP. THE WHO The proposed SOP is broader than both SOP 78-9 and APB Opinion no. 18, The Equity Method of Accounting for Investments in Common Stock. Under the proposal, holders of the following investments should apply the equity method of accounting:
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A corporate joint venture meeting the requirements of Opinion no. 18. Voting common stock if the investor is able to exercise significant influence. Nonvoting common stock or nonredeemable preferred stock if the investor is able
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This note was uploaded on 11/05/2011 for the course ACCOUNTING 101 taught by Professor Online during the Spring '11 term at Colorado Technical University.

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