ACCTG 101 Lecture Notes - Lecture 20: Preferred Stock, Commercial Paper
Document Summary
Debt investments: investments in government debt, corporate bonds, convertible debt, and commercial paper. Equity instruments: ownership interests in companies (e. g. common or preferred stock) To obtain short-term returns or long-term returns on investments, and for corporate strategy. Corporate strategy is to have a good relationship with the firm. Fair value through other comprehensive income (fv-oci) Use for debt instruments that are managed on a contractual yield basis and held till maturity. Equity instruments not accounted for under fv-oci. Equity investments with significant influence or control use. Equity investments held for trading purposes are fv-ni. Debt instruments that do not meet the criteria for the amortized cost or fv-oci models. Not meeting the criteria means they are held for short-term profit taking. **this includes debt and equity investments that are held for short- term profit taking and are bought and sold on a regular basis (i. e. held for trading)
