Company: EQS
Filing Date: 2025-04-10
Form Type: 10-K
Source: 0001712543-25-000016
Chunk: 34

Company: EQUUS TOTAL RETURN, INC.
Filing Date: 2025-04-10
Form: 10-K
Item: Item 8
Chunk 34
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      SIGNIFICANT ACCOUNTING POLICIES  

The following
is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:

Earnings
Per Share - Basic earnings per share is computed by dividing net increase (decrease) in net assets resulting from operations by
the weighted-average number of shares of common stock outstanding for the period. Other potentially dilutive common stock, and the related
impact to earnings, are considered when calculating earnings per share on a diluted basis.

Use of
Estimates - The preparation of financial statements in accordance with accounting principles generally accepted in the United
States (“ GAAP”) requires us to make estimates and assumptions that affect the reported amounts and disclosures in the financial
statements. Although we believe the estimates and assumptions used in preparing these financial statements and related notes are reasonable
in light of known facts and circumstances, actual results could differ from those estimates. We have identified valuation of investments
and revenue recognition as our most critical accounting estimates.

Consolidation - In
accordance with Article 6 of Regulation S-X under the Securities Act of 1933, we do not consolidate portfolio company investments. Under
Accounting Standards Committee (“ ASC”) 946, we are precluded from consolidating any entity other than another investment company,
except that ASC 946 provides for the consolidation of a controlled operating company that provides substantially all of its services to
the investment company or its consolidated subsidiaries.

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  TableOfContents  

Valuation of
Investments - For most of our investments, market quotations are not available. With respect to investments for which market quotations
are not readily available or when such market quotations are deemed not to represent fair value, our Board has approved a multi-step valuation
process each quarter, as described below:

  Each portfolio company or investment is reviewed by our investment professionals;  

  With respect to investments with a fair value exceeding                                                                                 

  Our Management produces a report that summarizes each of our portfolio                         

  The Audit Committee of our Board reviews and discusses the preliminary                                                                     
  valuation of our portfolio investments as recommended by Management in their report and any reports or recommendations of the independent  
  valuation firms, and then approves and recommends the fair values of our investments so determined to our Board for final approval; and    
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  The Board discusses valuations and determines the fair value of each                                                                    

During the
first twelve months after an investment is made