Companies have different motivations for investing in securities issued by other companies. One motivation is to earn a high rate of return. Another motivation for investing (in equity securities) is to secure certain operating or financing arrangements with another company. This course addresses the accounting for debt and equity investments and disclosure requirements. To provide useful information, companies account for investments based on the type of security (debt or equity) and their intent with respect to the investment. The course organizes the study of investments by type of security. Within each section, it explains how the accounting for investments in debt and equity securities varies according to management intent.
Objectives:
Market Value Method and Amortized Cost Method per ASC 320
Trading Securities
Available-for-Sale Securities
Held-to-Maturity Securities
Amortization of Bond Discount or Premium
Fair Value Alternative for Available-for-Sale and Held-to-Maturity Securities
Impairment Guidance
Structured Notes
Bond Quotes
Statement of Cash Flows
General Accounting for Investments
Blocks of Stock
Lump-Sum Purchase
Exchange (Conversion) of Securities
Stock Dividends
Preferred Stock Received for Common Stock Dividend
Stock Splits
Reclassification Adjustments Relating to Investments
Transfers of Securities between Categories
Classification and Disclosure
Comprehensive Example
Trading Securities
Available-for-Sale Securities
Securities Held to Maturity
For Bonds Only
Equity Method
Investments by Banks in Debt Securities
Investment in Certain Entities that Calculate New Asset Value per Share (or its Equivalent)
Examples from Annual Reports
Topics Covered
- Market Value Method and Amortized Cost Method
- Fair Value Alternative for Available-for-Sale and Held-to-Maturity Securities
- Bond Quotes
- Exchange (Conversion) of Securities
- Transfers of Securities between Categories
- Trading Securities
- Impairment Guidance
- Lump-Sum Purchase
- Stock Splits
- Investment in Certain Entities that Calculate New Asset Value per Share (or its Equivalent)
Delivery Method: Online Self Study
Level: Basic
Prerequisites: Basic Accounting
Category: Accounting and Auditing
Passing Score: 70%
NASBA: Yes QAS Self Study
Author: Delta Publishing
ABOUT THE SUBJECT MATTER EXPERT:
Dr. Jae K. Shim is Professor of Business at California State University, Long Beach,
California. Dr. Shim received his MBA and Ph.D. degrees from the University of California at Berkeley (Haas School of Business.) He has co-authored over 50 professional business books and has been a consultant to commercial and nonprofit organizations for over 30 years.
