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The Voice of the

Commonwealth's Counties

Financial Facts

Statement No. 90, Majority Equity Interests, explains that a government’s majority equity interest in a legally separate organization should be reported as an investment if that equity interest meets GASB’s investment definition. If the interest does not meet the definition of an investment, Statement 90 requires a government to report the legally separate entity as a component unit.

Statement No. 72, Fair Value Measurement and Application, defines an investment as a security or other asset that:

  • A government holds primarily for the purpose of income or profit, and
  • Has a present service capacity based solely on its ability to generate cash or be sold to generate cash.

VACo Contact: Vicky Steinruck, CPA

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