C.1 Summary of Accounting for a Limited Liability Equity Investment in a QAHP
The decision tree below illustrates how an investor should determine
what method to use to account for a limited liability equity investment in a
qualified affordable housing project (QAHP). Depending on the specific facts and
circumstances, an investor may account for the investment in one of the following
ways:
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Consolidate the QAHP entity in accordance with ASC 810.
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Account for the investment under the equity method of accounting in accordance with ASC 323.
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Use the proportional amortization method under ASC 323-740.
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Account for the investment in accordance with ASC 321 or by using the modified cost method as shown in ASC 323-740-55-7.
1
There is diversity in practice regarding how to
account for QAHP investments that do not qualify for the
proportional amortization method or the equity method of accounting.
Some tax equity investors may use the cost method of accounting
instead of ASC 321. See Section C.7 for additional
guidance.