复旦大学高级财务会计 第二章.pdf

Chapter 2: Stock Investments – Investor Accounting and Reporting Stock Investments: Objectives 1. Apply the fair value/cost and equity methods of accounting for stock investments. 2. Apply the equity method to purchase price allocations. 3. Learn how to test goodwill for impairment. 2-2 Stock Investments –Investor Accounting and Reporting 1: Levels of Influence or Control 2-3 Accounting for the Investment Degree of influence Accounting Lack of significant Financial assets influence / cost method Significant influence Equity method Associates(联营) / joint control Joints ventures （合营） FASB: Equity Method Subsidiary （子公 IASB: Cost method or 司） Control Equity Method (after 1 January 2016) CASC: Cost method 2-4 Significant Influence  20% to 50% voting stock ownership is a presumption of significant influence.  Use the equity method.  Dont use equity method if there is a lack of significant influence 1. Opposition by investee, 2. Surrender of significant shareholder rights, 3. Concentration of majority ownership, 4. Lack of information for equity method, and 5. Failure to obtain board representation. 2-5 Control  More than 50% voting stock ownership is presumptive evidence of control.  Prepare consolidated financial state