Comment: Investments in tax credit structures

 

In our comment letter submitted in response to the FASB’s proposal on accounting for investments in tax credit structures using the proportional amortization method, we generally agreed with the proposed guidance and expressed no significant concerns about its operability and auditability.

 

The existing guidance in ASC 323-740 applies only to investments in the low income housing tax credit program, so the proposal expands the use of the optional proportional amortization method to other tax credit programs, including the new markets tax credit, the historic rehabilitation tax credit, and the renewable energy tax credit, among others. The proposal retains the use of the proportional amortization method as an optional method, but an entity may choose not to apply the proportional amortization method and instead apply other methods, such as equity method accounting or cost method accounting (as applicable).

 

To read our comments in full, download the comment letter. 

 

 
 

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