ADMS 3585 Chapter Notes -Retained Earnings, Equity Method, Income Statement
Document Summary
May use fvpl if correcting accounting mismatch at time of acquisition. Can assign fvpl at recognition but cannot change anymore. Fvpl by default if held for strategic reasons, may designate fvoci w/ recycling at time of acquisition. Cost/amortized cost unless quoted in active market fvpl. Equity or cost/amortized cost unless quoted in active market . Subsequent adjust for amortization and impairment loss. Dividends, interest, gains/losses (income statement) recognize dividends (dividend income) and interest (interest income) as income upon sale, recognize gain/loss (gain/loss on sale of investment) Recognized in net income (loss on impairment) and can be reversed up to loss deducted. Investment income contains all dividends, interests, unrealized value every yr end; difference is unrealized gain/loss in investment income. Initial fv (cost) + direct transaction fees. Subsequent adjust to fair value every yr end; difference is unrealized holding gain/loss in oci. Initial acquisition cost including excess of book value. Add portion of net income to investment.