Bài giảng Financial Accounting - Appendix D: Investments

InvestmentsAppendix DLearning ObjectivesExplain why companies invest in other companiesAccount for investments in equity securities when the investor has insignificant influenceAccount for investments in equity securities when the investor has significant influenceAccount for investments in equity securities when the investor has controlling influenceAccount for investments in debt securitiesApp D-2Learning Objective 1Explain why companies invest in other companiesApp D-3Part AEquity InvestmentsApp D-4Illustration D.2—Accounting for Equity InvestmentsApp D-5Learning Objective 2Account for investments in equity securities when the investor has insignificant influenceApp D-6Equity Investments with Insignificant InfluenceOwnership of less than 20% of the voting stockUse fair value methodClassified as either:Trading securities: securities that the investor expects to sell in the near futureAvailable-for-sale securities: securities held for reasons other than attempting to profit from trading in the near futureApp D-7Purchase Equity Investments & Receive Cash DividendsApp D-8Sell Equity InvestmentsApp D-9Adjust to Fair Value: Trading SecuritiesApp D-10Adjust to Fair Value: Available-for-Sale SecuritiesApp D-11Learning Objective 3Account for investments in equity securities when the investor has significant influenceApp D-12Equity Investments with Significant InfluenceInvestor owns between 20% and 50% of the common stockUse the equity methodApp D-13Purchase Equity InvestmentsApp D-14Recognize Equity IncomeApp D-15Receive Cash DividendsApp D-16Learning Objective 4Account for investments in equity securities when the investor has controlling influenceApp D-17Equity Investments with Controlling InfluenceMore than 50% of the voting stockUse the consolidation methodParent company prepares consolidated financial statementsApp D-18Part BDebt InvestmentsApp D-19Learning Objective 5Account for investments in debt securitiesApp D-20Purchase Debt InvestmentsApp D-21Earn Interest RevenueApp D-22Sell Debt InvestmentsApp D-23Adjust To Fair ValueDebt investments are classified as:Held-to-maturity securitiesTrading securitiesAvailable-for-sale securitiesApp D-24End of Chapter Appendix DApp D-25