FASB proposes changes to simplify equity method investment accounting
October 30, 2026
FASB recently issued a proposed ASU to simplify equity method investment accounting, reduce compliance costs and address inconsistencies in existing guidance.
The proposal would introduce a single “significant influence” threshold to determine when the equity method applies, regardless of an entity’s legal structure, and clarify accounting requirements for investments with complex earnings-allocation arrangements.
The changes would affect entities with existing or potential equity method investments, as well as certain investments involving proportionate consolidation, proportional amortization, noncontrolling interests and real estate consolidation.
FASB will accept public comments on the proposed ASU through Monday, Jan. 11. Read more.
