TAILIEUCHUNG - Issues in Financial Accounting (19)

PART II: Corporate Accounting Concepts and . Issues Lecture 19. Learning. Learning Objectives. Objectives 1. Describe the accounting for the fair value option 2. Discuss the accounting for impairments of debt and equity investments 3. Explain why companies report reclassification adjustments 4. Describe the accounting for transfer of investment securities between. categories2 Investments. Investments. Other Reporting. Issues. Fair value option Impairment of value Reclassification. adjustments Transfers between. categories Fair value. controversy Fair. Fair Value. Value Option. Option Companies have the option to report most financial. instruments at fair value, with all gains and losses related to. changes in fair value reported in the income statement Applied on an instrument-by-instrument basis Fair value option is generally available only at the time a. company first purchases the financial asset or incurs a. financial liability Company must measure this instrument at fair value until. the company no longer has ownership4 LO 1 Describe the accounting for the fair value option. Fair. Fair Value. Value Option. Option Available-for-Sale Securities. Illustration: Hardy Company purchases stock in Fielder. Company during 2012 that it classifies as available-for-sale. At. December 31, 2012, the cost of this security is $100,000; its fair. value at December 31, 2012, is $125,000. If Hardy chooses the. fair value option to account for the Fielder Company stock, it. makes the following entry at December 31, 2012. Equity Investments 25,000. Unrealized Holding Gain or Loss—Income 25,0005 LO 1 Describe the accounting for the fair value option. Fair. Fair Value. Value Option. Option Equity Method. Illustration: Durham Company holds a 28 percent stake in. Suppan Inc. Durham purchased the investment in 2010 for. $930,000. At December 31, 2010, the fair value of the investment. is $900,000. Durham elects to report the investment in Suppan. using the fair value option. The entry to record this investment is. as follows. Unrealized Holding Gain or Loss—Income 30,000. Equity Investments 30,0006 LO 1 Describe the accounting for the fair value option. Impairment. Impairment of. of Value. Value Impairments of debt and equity securities are. losses in value that are determined to be other than. temporary,. based on a fair value test, and. are charged to income7 LO 2 Discuss the accounting for impairments of debt and equity investments. Impairment. Impairment of. of Value. Value Illustration: Strickler Company holds available-for-sale bond. securities with a par value and amortized cost of $1 million. The. fair value of these securities is $800,000. Strickler has previously. reported an unrealized loss on these securitie

• Sáng kiến kinh nghiệm
• Issues in economics today
• Lecture Issues in economics today
• Macroeconomic issues
• International issues
• Price control issues
• Opportunity cost
• Demand model
• Elasticity of demand
• Firm production
• Perfect competition
• Gross domestic product
• Federal spending
• Fiscal policy
• Monetary policy
• Flaws in the CPI
• International trade
• International monetary fund
• Trade agreements
• Economic model
• Environmental problems
• Economic models of health care
• Medicaid costs
• Public insurance
• Prescription drugs
• Economics of crime
• Human capital
• Measuring poverty
• Social security
• Head start
• Affirmative action