中财英文课件：ch17 Investments.pptx

PREVIEW OF CHAPTER;Understand the accounting for equity investments at fair value. Explain the equity method of accounting and compare it to the fair value method for equity investments. Discuss the accounting for impairments of debt investments. Describe the accounting for transfer of investments between categories.;ACCOUNTING FOR FINANCIAL ASSETS;Measurement Basis—A Closer Look;Measurement Basis—A Closer Look;Understand the accounting for equity investments at fair value. Explain the equity method of accounting and compare it to the fair value method for equity investments. Discuss the accounting for impairments of debt investments. Describe the accounting for transfer of investments between categories.;DEBT INVESTMENTS;Illustration: Robinson Company purchased €100,000 of 8% bonds of Evermaster Corporation on January 1, 2015, at a discount, paying €92,278. The bonds mature January 1, 2020 and yield 10%; interest is payable each July 1 and January 1. Robinson records the investment as follows: January 1, 2015;LO 2;;;Reporting of Bond Investment at Amortized Cost;;Computation Gain on Sale of Bonds;Understand the accounting for equity investments at fair value. Explain the equity method of accounting and compare it to the fair value method for equity investments. Discuss the accounting for impairments of debt investments. Describe the accounting for transfer of investments between categories.;Debt investments at fair value follow the same accounting entries as debt investments held-for-collection during the reporting period. That is, they are recorded at amortized cost. However, at each reporting date, companies Adjust the amortized cost to fair value. Any unrealized holding gain or loss reported as part of net income (fair value method). ;Illustration: Robinson Company purchased €100,000 of 8 percent bonds of Evermaster Corporation on January 1, 2015, at a discount, paying €92,278. The bonds mature January 1, 2020, and yield 10 percent; interest is payable eac