What is ASC Topic 946?

What is ASC Topic 946?

Financial Services—Investment Companies. (Topic 946) Disclosures about Investments in. Other Investment Companies.

What is an investment company under US GAAP?

US GAAP. IFRS. An investment company is an entity with the following fundamental characteristics: It is an entity that does both of the following: Obtains funds from one or more investors and provides the investor(s) with investment management services.

What ASC Topic number addresses liquidation basis of accounting?

ASC 205-30
ASC 205-30 notes: The Liquidation Basis of Accounting Subtopic provides guidance on when and how an entity should prepare its financial statements using the liquidation basis of accounting and describes the related disclosures that should be made.

What is condensed investment schedule?

A condensed schedule of investments must detail all individual positions and investments greater than 5% of net assets and all investments in any one issuer or underlying greater than 5% of net assets. Earnings per share (“EPS”) Required for publicly traded funds.

What is an investment company under ASC 946?

946-10-05-2 Paragraph superseded by Accounting Standards Update 2013-08. An investment company, as used in this Topic, generally is an entity that pools shareholders’ funds to provide the shareholders with professional investment management.

How do you determine if a company is an investment company?

Generally, an “investment company” is a company (corporation, business trust, partnership, or limited liability company) that issues securities and is primarily engaged in the business of investing in securities.

What is ASC 205?

ASC 205, Presentation of Financial Statements, provides the baseline authoritative guidance for presentation of financial statements for all US GAAP reporting entities. ASC 205-10-45-1A lists the required financial statements under US GAAP.

When would an entity use the liquidation basis of accounting under ASC 205 30?

Under ASC 205-30, liquidation is considered “imminent” when either the plan has been approved by the person(s) with the authority to make such a plan effective, and the likelihood is remote that (1) execution of the plan will be blocked by other parties, and (2) the reporting entity will return from liquidation, or …

Are condensed financial statements audited?

Condensed financial statements (either for an annual or an interim period) that are derived from audited financial statements of a public entity1 that is required to file, at least annually, complete audited financial statements with a regulatory agency.

What is the criteria to be an investment company?

In the original proposal, the FASB considered requiring an entity to meet six criteria to qualify as an investment company: (1) nature of investment activity, (2) express business purpose, (3) unit ownership, (4) pooling of funds, (5) fair value management and (6) reporting entity.

Which is the meaning of the term probable when used by the FASB in ASC 205 40?

The ASC master glossary states that probable refers to the fact that “the future event or events are likely to occur.”

What happens to retained earnings when a company is liquidated?

Once all assets have been sold, the proceeds are pooled along with the cash the firm had prior to the asset sale. At that point, the precise amount of retained earnings is irrelevant, as the firm essentially has been reduced to a pile of cash.

What is the difference between condensed and consolidated financial statements?

A consolidated balance sheet provides information about a company and all its subsidiaries in a single document. A condensed sheet boils all balance sheet information down to a few lines.

Can I start my own investment firm?

Starting your own investment company requires a lot of planning and forethought. You will need to incorporate your new business and register with the appropriate agencies and the state government.