1.6 SRCs With Significant Equity Method Investees (Rule 8-03(b)(3))
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, under Rule 8-03(b)(3), such registrants are required 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 discussion of registrants
that qualify as SRCs and have one or more equity method investees, see Section 2.5.