Chp12 Slides - Chp. 12: Investments Anthony Meder, Ph.D....

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Chp. 12: Investments Anthony Meder, Ph.D. Nov 29, Dec. 1 & 6
Background image of page 1

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

View Full DocumentRight Arrow Icon
What we will learn How to account for investments Differentiate between Held-to-maturity, Available-for-sale and Trading securities The Fair Value Option How to account for ‘Significant influence’ Equity method of reporting an investment GAAP and IFRS differences
Background image of page 2
Coca-Cola Note 10 Gross Unrealized Cost Gains Losses Est. Fair Value 2008 Trading Securities: Equities $ 74 $ -- $ (30) $ 44 Other Securities 7 -- (2) $ 5 $ 81 $ -- $ (32) $ 49 Avail. For sale Equities $ 329 $ 193 $ ( 7) $ 515 Other Securities 12 -- ( 5) 7 $ 341 $ 193 $ ( 12) $ 522 Held-to-maturity $ 74 $ -- $ -- $ 74
Background image of page 3

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

View Full DocumentRight Arrow Icon
FOUR CRITICAL EVENTS During the life of an investment, 4 critical events for the investor 1. Purchase of the investment 2. Recognizing investment revenue 1. Dividends from equity securities (stocks) 2. Interest from debt securities (bonds) 3. HOLDING the investment during changes in fair value ( unrealized holding gains and losses) 4. Selling the investment ( realized gain or loss)
Background image of page 4
Investor’s influence No significant influence Investor does not influence operating/financial policies Typically < 20% of voting stock held by investor Significant influence Investor can ‘flex muscle’ and influence the firm Typically holds between 20% and 50% of voting stock
Background image of page 5

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

View Full DocumentRight Arrow Icon
Choices in classification (SFAS 115) Each as a different accounting treatment Held-to-maturity (HTM) Debt securities only (equities do not have maturity date)
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/12/2012 for the course ACCT 211 taught by Professor Kamlet during the Spring '08 term at Binghamton University.

Page1 / 19

Chp12 Slides - Chp. 12: Investments Anthony Meder, Ph.D....

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online