Deloitte
Accounting Research Tool
...
Chapter 1 — Presentation of Separate Financial Statements and Summarized Financial Information

1.1 Introduction

1.1 Introduction

To ensure that investors receive relevant financial information about a registrant's significant activities, Regulation S-X requires registrants that have a significant equity method investee (i.e., “50 percent or less owned persons”) to provide financial information about the investee in their filings with the SEC.1 The SEC has indicated that the term 50 percent or less owned persons refers to all investments accounted for under the equity method2 even if the voting ownership exceeds this percentage. The applicable SEC disclosure requirements are primarily in Regulation S-X, Rules 3-09, 4-08(g), 8-03 (related to smaller reporting companies [SRCs]), and 10-01(b)(1)3 as well as Section 2400 of the SEC’s Financial Reporting Manual (FRM).

Footnotes

1
For a list of abbreviations used in this publication, see Appendix C.
2
The SEC disclosure requirements discussed in this Roadmap do not apply to an entity that is accounted for at fair value or under the practicability exception to fair value after the adoption of ASU 2016-01 under ASC 321-10-35-2. They do apply, however, to an investment that is eligible for the equity method of accounting but for which a registrant elects the fair value option. See Sections 3.1.3.6, 5.3, and 5.5 for more information.
3
For a list of the titles of standards and other literature referred to in this publication, see Appendix B.