会计学第十三章

20% or more of voting stock, ＜ 50% Equity method（权益法）
Class 5: Investment in Securities with
Controlling Influence（具有控制关系）

Investor owns more than 50% of voting stock Consolidation ——并表
Amortized cost （摊余成本；折价或溢价摊销） Debt securities intended to be held until maturity
Class 3: Available-for-Sale Securities —
Market value 2 Debt and non-influential equity securities
Reporting of Non-influential Investments ——不具有重大影响的投资
Available-for-Sale Securities
Not classified as trading or HTM; Purchased to yield interest, dividends, or increases in market value Not actively managed like trading securities
How about acquired by a discount or a premium? ?
Disposition: held to mature! HTM
Dr: Cash Cr: Long-term Investment –HTM
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Accounting Basics for Equity Securities
Accounting for this long-term investment? Equity method with consolidation –in USA Cost method with consolidation –in China
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Accounting Basics for Debt Securities
Chapter 13 Investments in Securities
——financial assets
Conceptual Learning Objectives
C1: Distinguish between debt and equity
securities and between short-term and long-term investments. C2: Identify and describe the different classes of investments in securities.
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Accounting Basics for Debt Securities
Acquisition：取得投资时
Sep.1

Dr: Long-term Investment –HTM Cr: Cash
Interest Earned: maybe adjusting!
Dec.31 Dr: Interest Receivable Cr: Interest Revenue Feb.28 Dr: Cash Cr: Interest Receivable Interest Revenue
Trading Securities ——current assets!
Acqterm Investment –Trading Cr: Cash Shown on B/S Valuing at B/S date: Fair Market Value! Dec. 31 Dr: Market Adjustment-Trading Cr: Unrealized Gain –Income Disposition: Jan.9 Dr: Cash Cr: Short-term Investments –Trading Gain on Sale of Short-term Investments Net Proceeds 12 - Cost
Investments in Securities with Significant Influence 20%~50% of voting stock
Jan. 1 Long-term Investments –Star 70,650 Cash 70,650 (to record purchase of 30% shares of Star) Dec. 31 Long-term Investment –Star 6,000 Earnings from Long-term Investment 6,000 (Star reports net income 20,000 for the year) Jan. 9 Cash 3,000 Long-term Investments –Star 3,000 (Star pays 10,000 cash dividends )
The company’s (investor’s) percent ownership in the other company’s (investee’s) equity securities.
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Basics of Investments
——Classification and Reporting
3
11-3
Basics of Investments

Motivations for investments

Companies transfer excess cash into investments to produce higher income.

Entities like mutual funds are set up to produce income from investments.
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Basics of Investments
——Debt and Equity Securities
Debt Securities 债务性证券


Reflect a creditor relationship, eg. investments in notes, bonds, certificates of deposit Issued by governments, companies, & individuals
Acquisition：取得投资时 1000 shares
Oct.10 Dr: Long-term Investment –AFS Cr: Cash Dr: Cash /Dividend Receivable Cr: Dividend Revenue
Sale Proceeds －Cost
Dividend Earned:
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Reporting of Influential Investments ——具有重大影响的投资
Investments in Securities with Controlling Influence over 50% of voting stock

Parent Company vs. Subsidiary Consolidated Financial Statements
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Basics of Investments
——Classification and Reporting
Class 4: Investment in Securities with
Significant Influence（具有重大影响）

The investor can exert significant influence over the investee
Equity Securities 权益性证券

Reflect an owner relationship such as shares of stock issued by companies
6
Basics of Investments
——Classification and Reporting
Valuing at B/S date: Fair Market Value!
Dec. 31 Dr: Market Adjustment-AFS Cr: Unrealized Gain –Equity
13
Reporting of Influential Investments ——具有重大影响的投资（权益法）
Class 1: Trading Securities —Market value 1

Debt and non-influential equity securities that are actively managed and traded for profit
Class 2: Held-to-Maturity Securities —
Three factors affecting investments classification and reporting:
Security type - debt or equity,
M’s intent to hold the security either short term or long term, (ability) and
Financial and Managerial Accounting
John J. Wild Third Edition
McGraw-Hill/Irwin
1
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