TAILIEUCHUNG - Lecture Intermediate accounting (16th edition): Chapter 17 - Kieso, Weygandt, Warfield

Chapter 17 - Investments. After completing this chapter, students will be able to: Identify the three categories of debt securities and describe the accounting and reporting treatment for each category, understand the procedures for discount and premium amortization on bond investments, identify the categories of equity securities and describe the accounting and reporting treatment for each category,. | PREVIEW OF CHAPTER 17 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Understand the accounting for investments in debt securities. Understand the accounting for investments in equity securities. LEARNING OBJECTIVES Explain the equity and consolidation methods of accounting. Evaluate other major issues related to investments in debt and equity securities. After studying this chapter, you should be able to: Investments 17 LO 1 Different motivations for investing: To earn a high rate of return. To secure certain operating or financing arrangements with another company. INVESTMENT IN DEBT SECURITIES LO 1 Companies account for investments based on the type of security (debt or equity) and their intent with respect to the investment. ILLUSTRATION 17-1 Summary of Investment Accounting Approaches LO 1 INVESTMENT IN DEBT SECURITIES Debt securities represent a creditor relationship: . government securities Municipal securities Corporate bonds Convertible debt Commercial paper Type Held-to-maturity Trading Available-for-sale Accounting Category LO 1 Debt Investment Classifications ILLUSTRATION 17-2 Accounting for Debt Securities by Category Amortized cost is the acquisition cost adjusted for the amortization of discount or premium, if appropriate. LO 1 Debt Investment Classifications Classify a debt security as held-to-maturity only if it has both the positive intent and the ability to hold securities to maturity. Accounted for at amortized cost, not fair value. LO 1 Held-to-Maturity Securities (Amortized Cost) Amortize premium or discount using the effective-interest method unless the straight-line method yields a similar result. INVESTMENT IN DEBT SECURITIES Illustration: Z-Smith Company purchased $100,000 of 8 percent bonds of Bush Corporation on January 1, 2016, at a discount, paying $92,278. The bonds mature January 1, 2021 and yield 10%; interest is payable each July 1 and January 1. Z-Smith records the investment as follows: January 1, 2016 Debt .

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• Intermediate accounting
• Lecture Intermediate accounting
• Investment accounting approaches
• Debt securities
• Held to maturity
• Trading securities
• Financial Accounting
• Accounting process
• Accounting equation
• Accounting processing cycle
• Stock issuance
• Estimating reserves
• Liquidating dividends
• Accounting changes
• Error corrections
• Accounting choices
• Theoretical structure
• Accrual accounting
• Financial accounting environment
• Accounting for leases
• Leasing environment
• Accounting by lessee
• Special accounting problems
• Cash versus accrual accounting
• International standard setting
• Accounting standards
• Accounting assists
• The challenges facing accounting
• Income taxes
• Accounting for income taxes
• Deferred tax liabilities
• Error analysis
• Accounting policy
• Accounting estimate
• Accounting policies
• Financial reporting
• Accounting information system
• Measurement issues
• Characteristics of accounting
• Capital allocation process