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4 Cards in this Set
- Front
- Back
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3 Approaches to financial reporting of investments in corporate equity securities
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1) Fair Value Method (FV)
2) Consolidation of Financial Statements 3) Equity Method |
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Purchases of corporate equity securities pose a considerable number of financial reporting issues because a close relationship has been established without the investor gaining actual control. Which method of financial reporting addresses this issue?
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The Equity Method
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Fair Value Method (SFAS 115)
how is it recorded? |
Initial Investments in equity securities are recorded at cost and subsequently adjusted to FV if FV readily deternimable. Otherwise investment remains at cost
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Fair Value Method (SFAS 115)
HFS (held for sale equities) in the short term are classified as what? and recorded at what? |
Classified as Trading Securities and recorded at FV. Unrealized gains and losses included in earnings
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