BU387 Lecture Notes - Lecture 11: Discounted Cash Flow, Book Value, Accrued Interest
Document Summary
Models of accounting for investments: cost / amortized cost model, fv-ni, fv-oci (or fv-tpl, cost model (equity) For investments in shares of another entity. At disposal, derecognize and report a gain/loss on disposal in net income. Impairment: incurred loss model, expected loss model, full fair value model, amortized cost model (debt) For investments in debt securities of another entity. Amortize any discount/premium by adjusting carrying amount. At disposal, bring accrued interest and discount/premium amort. Up to date, derecognize investment, and report a gain/loss on disposal in ni. At sale, new carrying amount = amortized cost balance + discount (or premium) Impairment loss = carrying amount revised pvfcf. Discount @ original/historical effective rate on loan. Representation on bod, participate in policy making. Material intercompany transactions, exchange of management personnel. Determined using the discounted cash flow model (same as aspe ) Ifrs investments in associates (significant influence) equity method. Pe gaap significant influence investments equity method or cost method.
