Unformatted text preview: , resulted
from a lower market valuation of securities of TurboChef Technologies, Inc., and investments in privately
held Internet-related Companies ….. The loss on securities charge of $17.6 million was noncash.
In its 20X4 annual report to shareholders, Maytag Corporation included the following disclosures in its
income statement and related footnotes:
CONSOLIDATED STATEMENTS OF INCOME Special Charges and Loss on Securities 179.Describe the various levels of inputs, explaining key aspects that distinguish them, and indicate which
level is most preferred and which is least preferred.
Companies need to consider GAAP regarding fair value measurements when determining the fair value
of an investment that distinguishes between various levels of inputs to fair value determination.
Required: 180.What classification procedure and subsequent classification could Jaycom follow in order to meet its
objective? How will Jaycom justify its choice to the Jaycom auditors?
Jaycom Enterprises has invested its excess cash in the stock of several different companies and desires to
maximize income over the short run. Jaycom is unsure about the appropriate investment policy and thus
what reporting practice to follow.
Required: 181.(1.) What factors determine which method should be used?
(2.) What events are recorded when the equity method is used?
(3.) What events are recorded when the securities are accounted for as available for sale?
Newjohn Company owns stock in several affiliated companies. Investments in some of these affiliates are
accounted for as securities available for sale while some are accounted for using the equity method.
Required: 182.What securities must be classified within one of the three categories of held to maturity, available for
sale, and trading? (Do not describe how to determine how securities are classified among these three
categories.) Identify the four primary recording activities related to investments in securities.
Discuss the following questions.
Required: 183.(1.) What factors could be evidence of significant influence?
(2.) What factors could be evidence of lack of significant influence?
When an i...
View Full Document
- Spring '09
- Balance Sheet, A. Securities