On January 2, 2017, Marcell Inc. bought 10% of the outstanding common stock of Reesan, Inc. for $80 million cash, and accounts for the investment using the cost method because fair value is not readily determinable. At the date of acquisition of the stock, Reesan's net assets had a book value and fair value of $500 million. Reesan's net income for the year ended December 31, 2017, was $30 million. During 2017, Reesan Inc. declared and paid cash dividends of $10 million. On December 31, 2017, Marcell's investment should be reported at $81 million in balance sheet.
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Equity investments with readily determinable fair values: ASC 321 requires equity investments that have readily determinable fair values to be measured at fair value through net income.
Equity investments without readily determinable fair values: An entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
$80 million is the cost paid, so that would be the investment’s carrying value for investment in common stock of Reesan Inc. as this is a non-marketable security.