investment in equity securities

investment in equity securities - INVESTMENT IN EQUITY...

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INVESTMENT IN EQUITY SECURITIES 1. What is an investment in equity securities? 2. Give examples of equity securities. (shares) 3. How do you call the owners of equity securities? (shareholders) 4. Distinguish share from share certificate. 5. What is the initial measurement of investment in equity securities? (FV plus transaction costs) 6. Is the transaction cost capitalized in all instances? What is an exception circumstance? (No. When held for trading- TC, expensed immediately) 7. Can you give examples of consideration for investment in equity securities? ( exchange for asset, cash) 8. If the equity securities are acquired in an exchange, what would the fair value be? a. FV of asset given up b. FV of asset received c. CA of asset given up 9. How do you allocate the cost of the equity securities if they are acquired at a single cost or lump sum? a. On the basis of their fair values b. If only one FV, first to the one with known FV. Remainder, to the one with no known FV. Note: Answer P16-2 10. How do you measure investment in unquoted equity securities? Generally, at FV. Exception: if the FV cannot be determined. At COST 11. What is the formula in computing for the gain or loss on sale of equity securities? (difference between consideration received and
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