ACCT 305 Live Lecture Week 4

ACCT 305 Live Lecture Week 4 - ACCT 305 Live Lecture Week 4...

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ACCT 305 Live Lecture Week 4 Monique Smalling, CPA
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Agenda Week 4 TCOs Overview of Chapter 12: Investments Chapter 12 homework examples Revisit TCOs
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Week 4 TCO TCO 5: Given data concerning investments in securities, determine the proper financial statement presentation of the securities. Explain how to identify and account for investments classified for reporting purposes as "held to maturity," as "available for sale," and as "trading securities." Explain what constitutes significant influence by an investor over the operating and financial policies of an investee for purposes of determining whether or not to use the equity method for accounting by the investor. Understand the way investments are recorded and reported under the cost method and equity method of accounting. Determine when financial statements should be consolidated. Explain adjustments made using the equity method of accounting when the fair value of net assets of the underlying investment exceeds their book value at acquisition.
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Debt vs. Equity Securities Debt securities Have a maturity date Examples: bonds or other debt securities Equity securities Do not have a maturity date Examples: stock
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3 Levels of Ownership < 20 % ownership SFAS 115 20-50% ownership Equity method >50 % ownership Consolidation
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SFAS 115 Ownership level: < 20% ownership Types of securities: Debt and equity Categories Held-to-Maturity Trading Available-for-Sale
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Realized vs. Unrealized
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This note was uploaded on 02/05/2012 for the course ACCT 305 taught by Professor Charlie during the Spring '11 term at University of Phoenix.

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ACCT 305 Live Lecture Week 4 - ACCT 305 Live Lecture Week 4...

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