1.6 SRCs With Significant Equity Method Investees
The reporting requirements related to significant equity method
investments are different for SRCs than for other registrants. In accordance with
paragraph 5330.2 of the FRM,
while Rule 3-09 does
not apply to SRC registrants and “[t]here is no equivalent to [Rule 3-09 in] Article
8,” registrants should provide financial statements of equity method investees when
such information is material to the registrants’ investors.
Further, while Rule 4-08(g) also does not apply to SRC registrants, such
registrants are required under Rule 8-03(b)(3) to provide summarized income statement information
in their annual and interim financial statements for all
equity method investees that exceed 20 percent significance individually or in the
aggregate by using the investment, income, and asset tests discussed in Chapter 3 of this Roadmap. In
a manner consistent with Rule 4-08(g), the summarized income statement information
included in the annual financial statements may not be labeled “unaudited.”
The guidance discussed in this Roadmap generally applies only to
registrants that do not qualify as SRCs. For additional guidance applicable to
registrants that qualify as SRCs, see Section 2.5.