Presentation is loading. Please wait.

Presentation is loading. Please wait.

Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Published byRosamund Bell Modified over 9 years ago

Similar presentations

Presentation on theme: "Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education."— Presentation transcript:

1 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Spiceland | Thomas | Herrmann Financial Accounting Investments Appendix D

2 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objectives Explain why companies invest in other companies Account for investments in equity securities when the investor has insignificant influence Account for investments in equity securities when the investor has significant influence Account for investments in equity securities when the investor has controlling influence Account for investments in debt securities App D-2

3 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objective 1 Explain why companies invest in other companies App D-3

4 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Part A Equity Investments App D-4

5 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Illustration D.2—Accounting for Equity Investments App D-5

6 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objective 2 Account for investments in equity securities when the investor has insignificant influence App D-6

7 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Equity Investments with Insignificant Influence Ownership of less than 20% of the voting stock Use fair value method Classified as either: Trading securities: securities that the investor expects to sell in the near future Available-for-sale securities: securities held for reasons other than attempting to profit from trading in the near future App D-7

8 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Purchase Equity Investments & Receive Cash Dividends App D-8

9 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sell Equity Investments App D-9

10 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Adjust to Fair Value: Trading Securities App D-10

11 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Adjust to Fair Value: Available-for- Sale Securities App D-11

12 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objective 3 Account for investments in equity securities when the investor has significant influence App D-12

13 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Equity Investments with Significant Influence Investor owns between 20% and 50% of the common stock Use the equity method App D-13

14 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Purchase Equity Investments App D-14

15 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Recognize Equity Income App D-15

16 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Receive Cash Dividends App D-16

17 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objective 4 Account for investments in equity securities when the investor has controlling influence App D-17

18 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Equity Investments with Controlling Influence More than 50% of the voting stock Use the consolidation method Parent company prepares consolidated financial statements App D-18

19 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Part B Debt Investments App D-19

20 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objective 5 Account for investments in debt securities App D-20

21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Purchase Debt Investments App D-21

22 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Earn Interest Revenue App D-22

23 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sell Debt Investments App D-23

24 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Adjust To Fair Value Debt investments are classified as: Held-to-maturity securities Trading securities Available-for-sale securities App D-24

25 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. End of Chapter Appendix D App D-25

Download ppt "Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education."

Similar presentations

MANAGEMENT DECISIONS AND FINANCIAL ACCOUNTING REPORTS

MANAGEMENT DECISIONS AND FINANCIAL ACCOUNTING REPORTS
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Reporting and Interpreting Investments in Other Corporations Chapter 12.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Reporting and Interpreting Investments in Other Corporations Chapter 12.
Chapter Four Consolidated Financial Statements and Outside Ownership McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Four Consolidated Financial Statements and Outside Ownership McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Appendix D Investments in Other Corporations © 2009 The McGraw-Hill Companies, Inc.

Appendix D Investments in Other Corporations © 2009 The McGraw-Hill Companies, Inc.
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Appendix D Investments in Other Corporations PowerPoint Authors:

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Appendix D Investments in Other Corporations PowerPoint Authors:
13 Investments and Fair Value Accounting

13 Investments and Fair Value Accounting
Mergers, Acquisitions, and Other Inter- corporate Investments.

Mergers, Acquisitions, and Other Inter- corporate Investments.
© Copyright D Hillman 20001 Investments in Stocks and Bonds.

© Copyright D Hillman Investments in Stocks and Bonds.
© 2004 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 12 Investments.

© 2004 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 12 Investments.
1 Investments in Debts and Equity Securities. 2  Determine why companies invest in other companies.  Understand the varying classifications associated.

1 Investments in Debts and Equity Securities. 2  Determine why companies invest in other companies.  Understand the varying classifications associated.
E-1. E-2 REPORTING AND ANALYZING INVESTMENTS Financial Accounting, Sixth Edition D.

E-1. E-2 REPORTING AND ANALYZING INVESTMENTS Financial Accounting, Sixth Edition D.
12-1 PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA.

12-1 PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA.
PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Copyright.

PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Copyright.
Investments in Stocks and Bonds of Other Companies Chapter 23.

Investments in Stocks and Bonds of Other Companies Chapter 23.
Investments Sid Glandon, DBA, CPA Assistant Professor of Accounting The University of Texas at El Paso.

Investments Sid Glandon, DBA, CPA Assistant Professor of Accounting The University of Texas at El Paso.
4/20/2017 Chapter 12 Investments.

4/20/2017 Chapter 12 Investments.
BMGT 220, Chapter 12 Discussion Kristian Sooklal 443-797-4588 (cell) | 410-575-4719 (text)

BMGT 220, Chapter 12 Discussion Kristian Sooklal (cell) | (text)
15 Investments and Fair Value Accounting

15 Investments and Fair Value Accounting
11-113-1 Investments and Fair Value Accounting 13.

Investments and Fair Value Accounting 13.
Tools for Business Decision-Making Fourth Canadian Edition Financial Accounting: Prepared by: Peggy Coady Memorial University of Newfoundland & Catherine.

Tools for Business Decision-Making Fourth Canadian Edition Financial Accounting: Prepared by: Peggy Coady Memorial University of Newfoundland & Catherine.

Similar presentations

Ads by Google