Chapter 12 Investments （投资）.ppt

Investments 0 --------------20% ------------ 50% -------------- 100% These securities can be classified as current assets or as non-current assets, depending on the intent of management (sell the securities within the next year or operating cycle). Procedure for determining fair value and the unrealized gain or loss for these securities is the same as for trading securities. Companies report securities at fair value, and report changes from cost as a component of equity. Non-Trading Securities Categories of Securities Illustration: Assume that Ingrao Corporation has two securities that it classifies as non-trading. The adjusting entry for Ingrao Corporation is: Dec. 31 Unrealized Gain or Loss—Equity 9,537 Fair Value Adjustment—Non-trading 9,537 Illustration 12-8 Non-Trading Securities An unrealized loss on non-trading securities is: reported under Other Revenue and Expense in the income statement. closed-out at the end of the accounting period. reported as a separate component of equity. deducted from the cost of the investment. Accounting for Debt Investments Question Also called marketable securities, are securities held by a company that are readily marketable and intended to be converted into cash within the next year or operating cycle, whichever is longer. Investments that do not meet both criteria are classified as long-term investments. Statement of Financial Position Presentation Short-Term Investments Illustration 12-9 Presentation of short-term investments Presentation of Realized and Unrealized Gain or Loss Illustration 12-10 Non-operating items related to investments Statement of Financial Position Presentation Unrealized gain or loss on non-trading securities are reported as a separate component of equity. Illustration 12-11 Realized and Unrealized Gain or Loss Statement of Financial Position Presentation Classified Statement of Financial Position Illustration 12-12 Fair Value – next slide Equity Method - * Chapter 12 Investments (投資)