2009 F-3(B) Class Notes

2009 F-3(B) Class Notes - Becker CPA Review Financial 3(B...

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Becker CPA Review – Financial 3(B) Class Notes 1 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. FINANCIAL 3(B) CLASS NOTES Financial 3 includes the following: I. MARKETABLE SECURITIES A. Marketable securities have readily determinable fair values. These include equity and/or debt securities. 1. There are three marketable securities portfolio classifications: trading securities , available-for-sale securities and debt securities intended to be held until maturity . 2. The trading securities portfolio can contain debt and/or equity securities intended for active trading . The portfolio itself is carried at cost and is reported at fair value in the financial statements through the use of a valuation account. Unrealized gains or losses are reported on the income statement. 3. The available-for-sale securities portfolio can contain debt and/or equity securities that do not fit into either of the other two portfolios . The portfolio itself is carried at cost and is reported at fair value in the financial statements through the use of a valuation account. Unrealized gains or losses are reported in Other Comprehensive Income (the “U” in PUFE). 4. The held-to-maturity portfolio can contain only debt securities where the investor has the ability and intent to hold to maturity. The portfolio itself is reported in the financial statements at amortized cost . 5. Special rules apply to reclassifications and impairment . II. DETERMINING THE CORRECT METHOD TO USE A. Use the cost method when the investor cannot exercise significant influence over the investee - generally ownership of less than 20% of outstanding voting shares. B.
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2009 F-3(B) Class Notes - Becker CPA Review Financial 3(B...

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