北大光华课件《财务报表分析》 Chap11.pptVIP

Financial Assets We have covered physical assets such as account receivables, inventory, and long-lived assets. Companies also possess financial assets. Examples of financial assets include government bonds, corporate bonds issued by other companies, stocks of other companies; they basically fall into two categories: debts and stocks. If the company holds another company’s bond, this company is a creditor; if holds another company’s stock, this company is a shareholder. Good news… In these last two lectures, we use real University of Chicago GSB lecture notes… And you judge which school offers better financial accounting course, Guanghua or Chicago GSB? Types of financial assets 1. Marketable securities (both debts and stocks): Current assets 2. Minority, passive（被动） investments 3. Minority, active investments 4. Majority, active investments Types of Investments Types of Investments (Cont.) Minority, passive investments Less than 20% of voting stock. Assumed to be held for short term returns including dividends and capital gains. Minority, active investments Between 20% and 50% of voting stock. Assumed to be held to exert influence over the other company. Majority, active investments Greater than 50% of voting stock. Assumed to be held so for full control over the other company. Marketable Securities Marketable securities are bonds or stocks for which there is an active market and hence a reliable market value. They are liquid assets in that they can easily and quickly be converted into cash. Marketable securities held as a temporary investment are classified as current assets. Classification Securities are properly classified as marketable securities when 1. The firm can readily convert them into cash, and 2. Intends to do so when it needs cash. If either of the two tests for marketable securities do not apply, then the securities are properly classified as investment in securities. Investment in securities are securities held for long-term goals and are