{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ch17tcShort - CHAPTER 17 INVESTMENTS Intermediate...

Info icon This preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 17-1 C H A P T E R C H A P T E R 17 17 INVESTMENTS INVESTMENTS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 17-2 1. Identify the three categories of debt securities and describe the accounting and reporting treatment for each category. 2. Understand the procedures for discount and premium amortization on bond investments. 3. Identify the categories of equity securities and describe the accounting and reporting treatment for each category. 4. Explain the equity method of accounting and compare it to the fair value method for equity securities. 5. Describe the accounting for the fair value option. 6. Discuss the accounting for impairments of debt and equity investments. 7. Explain why companies report reclassification adjustments. 8. Describe the accounting for transfer of investment securities between categories. Learning Objectives Learning Objectives
Image of page 2
Chapter 17-3 Different motivations for investing: To earn a high rate of return. To secure certain operating or financing arrangements with another company. Investment Accounting Approaches
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 17-4 Companies account for investments based on the type of security (debt or equity) and their intent with respect to the investment. Investment Accounting Approaches Illustration 17-1
Image of page 4
Chapter 17-5 LO 1 I dentify the three categories of debt securities and describe the accounting and reporting treatment for each category. Debt securities (creditor relationship): Investments in Debt Securities U.S. government securities Municipal securities Corporate bonds Convertible debt Commercial paper Type Held-to-maturity Trading Available-for-sale Accounting Category
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 17-6 LO 1 I dentify the three categories of debt securities and describe the accounting and reporting treatment for each category. Investments in Debt Securities Accounting for Debt Securities by Category Illustration 17-2
Image of page 6
Chapter 17-7 Held-to-Maturity Securities Classify a debt security as held-to-maturity only if it has both (1) the positive intent and (2) the ability to hold securities to maturity. Accounted for at amortized cost , not fair value. Amortize premium or discount using the effective- interest method unless the straight-line method yields a similar result. LO 2 Understand the procedures for discount and premium amortization on bond investments.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 17-8 LO 2 Understand the procedures for discount and premium amortization on bond investments. Illustration: KC Company purchased $100,000 of 8 percent bonds of Evermaster Corporation on January 1, 2009, at a discount, paying $92,278. The bonds mature January 1, 2014 and yield 10%; interest is payable each July 1 and January 1. KC records the investment as follows: January 1, 2009 Held-to-Maturity Securities 92,278 Cash 92,278 Held-to-Maturity Securities
Image of page 8
Chapter 17-9 LO 2 Illustration 17-3 Schedule of Interest Revenue and Bond Discount Amortization— Effective-Interest Method Held-to-Maturity Securities
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 17-10 LO 2 Understand the procedures for discount and premium amortization on bond investments.
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern