What is ASC Topic 946?
Overview. ASC 946 provides guidance for “certain activities engaged in by investment companies.” ASC 946-10 notes that the the Topic “only provides incremental industry-specific guidance for the entities that meet the assessment of investment company status” described in ASC 946-10-15-4 through 15-9.
How do you record investment accounting?
To record this in a journal entry, debit your investment account by the purchase price and credit your cash account by the same amount. For example, if your small business buys a 40-percent stake in one of your suppliers for $400,000, you would debit the investment account and credit cash each by $400,000.
How do you record stock investments?
Under the cost method, the stock purchased is recorded on a balance sheet as a non-current asset at the historical purchase price, and is not modified unless shares are sold, or additional shares are purchased. Any dividends received are recorded as income, and can be taxed as such.
What is ASC 946-10 topic?
ASC 946 provides guidance for “certain activities engaged in by investment companies.” ASC 946-10 notes that the the Topic “only provides incremental industry-specific guidance for the entities that meet the assessment of investment company status” described in ASC 946-10-15-4 through 15-9.
Does ASC 946 apply to real estate investment trusts?
For example, an entity regulated under the Investment Company Act of 1940 would always follow ASC 946. On the other hand, a real estate investment trust (REIT) is excluded from ASC 946 as it must follow ASC 974, Real Estate – Real Estate Investment Trusts.
Are you looking for high-quality accounting training for ASC 946?
Those working in the investment management industry, or responsible for auditing companies operating in this space, know that finding high-quality, easy to understand accounting training on the requirements of ASC 946 is next to impossible!
What is the AICPA technical questions and Answers section 6910?
The AICPA published Technical Questions and Answers (Q&A Section 6910 – Investment Companies) to provide additional guidance on this topic. This guidance is also a helpful tool to apply the assessment of facts and circumstances to any judgmental area of the ASC 946 framework.
