ACTG 3110 Lecture Notes - Equity Method

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[might as well pick equity since will switch to equity in the future anyway] Fv every b/s date changes go in net income. Consolidate or equity method or the shares were public (fair value) private (cost) Fair value changes go into net income & expense transaction costs. Fv changes will hit net income. Fair value through profit and loss changes go into net income & expense transaction costs. Don"t have to worry about tainting provision, don"t have to worry about intent to hold to maturity. Transfer from acoci to r/e, no impact on i/s. Held-to-maturity (must be careful about intent to hold to maturity in part v) Oci, realized changes hit net income and then go to r/e. Transaction costs are then get cost expensed for fv, capitalized for cost or amortized cost expensed for fv, capitalized for cost or amortized cost. Must record at fair value (presume you can estimate fair value somehow)

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