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U.S. comment letter on equity method

Published on: Aug 05, 2015

Deloitte & Touche LLP comments on the FASB’s proposed ASU, Simplifying the Equity Method of Accounting, issued by the FASB on June 5, 2015.

An excerpt from the comment letter is shown below:

[We] support the Board’s objective of simplifying equity method accounting by removing the concept of one-line consolidation. We also support the Board’s proposal to eliminate the retrospective application of equity method accounting to situations in which an investment qualifies for the use of such accounting as a result of an increase in level of ownership.

Although we support the Board’s objective, we are concerned that the proposed simplification of equity method accounting could introduce new challenges related to the underlying principles of such accounting and could lead to new complexities.

Full text of the comment letter is available below.

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