贵金属投资技术分析英文版(37).pptVIP

Investments as line of business idle cash purpose financial instruments stocks bonds derivatives Accounting for Debt and Equity Investments Classification of Financial Instruments Financial assets at fair value through profit or loss: has two subcategories: Trading securities: Marketable securities – both equity and debt securities – that are held for short-term profit purposes; and Derivatives: financial instruments that do not have a value by themselves but derive their value from the underlying security or asset such as shares, foreign exchange, commodities etc.- except for cash flow hedges that are accounted for similar to trading securities; Held to Maturity: Debt securities for which a firm has both the positive intent and ability to hold to maturity Available for Sale Securities: Neither trading securities nor securities held to maturity- usually classified as long term investments. Short-Term Investments-Trading Securities usually consist of : marketable equity securities (stocks of other companies) savings accounts (time deposits) investment funds precious metals like gold government bonds treasury bills asset securitized bonds private bonds Characterized by frequent and active buying and selling with the object of generating profit Typically only financial institutions hold trading securities Since trading securities are acquired for short-term profit, unrealized gains or losses that result from adjustments to market value pass through the income statement and increase or reduce net income before there is a sale of the securities. Accounting for Marketable Equity Securities record them at the acquisition cost that includes the price of the security plus any brokerage commissions and applicable taxes, and other costs incurred record dividend revenue when dividends declared and later when cash is received adjust to fair market value at the end of the accounting period-adjusting entry Adjusting Entries-Trading Securities at the end of an acco