significant influence Type of Investment? Debt Securities Equity Securities Consolidate Use amortized cost method Does management have positive intent and ability to hold to maturity? Greater than 50% ownership of voting stock? Yes No No Yes Does investor have significant influence over investee? Classify as held-to- maturity Use equity method Yes No Does security have readily determinable fair value? Use cost method Yes No Use fair value method Classify as trading security (current asset) Measure and report at fair value as of balance sheet date Include unrealized holding gains and losses as a part of earnings of the period Is the security held for current resale? Yes Classify as security available for sale (current or noncurrent) Include unrealized holding gains and losses as a separate component of stockholders’ equity Measure and report at fair value as of balance sheet date No