In addition to debt securities and publicly traded equities, an entity may

hold other types of investments, including these three:

1. Equity interests in non–publicly traded corporations

2. Ownership interests in noncorporate entities, such as partnerships and

joint ventures

3. Nonfinancial assets, such as land, buildings, property, and so on held

as investment property

The focus of this chapter is on the first two categories—ownership interests

that fall outside the scope of the publicly traded companies covered in

Chapter 4. See Chapter 10 for a discussion of the accounting for land and

buildings held as investment property.

Sources of U.S. GAAP and IFRS

U.S. GAAP covering the accounting for ownership interests is found in

quite a few standards and other documents. Those with the most frequent

application include the following:

ARB 51, Consolidated Financial Statements

FIN 46R, Consolidation: Variable Interest Entities

APB No. 18, The Equity Method of Accounting for Investments in Common

Stock

SOP 78-9, Accounting for Investments in Real Estate Ventures

EITF 00-1, Investor Balance Sheet and Income Statement Display Under

the Equity Method for Investments in Certain Partnerships and

Other Ventures