chapter 9 condensed notes.docx

1 Page
Unlock Document

Accounting & Financial Management
AFM 291
Robert Ducharme

Chapter 9 Condensed Notes IFRS Requirements  Amortized cost used only if firm's business model is to manage the instrument as if held to maturity and under contractual cash flow  Otherwise use FV-NI  Proposal: if held for longer term strategic reasons, accounted for under FV-OCI without recycling  Fair value to correct an accounting mismatch Cost Model: Equity Investment  Changes in investment's market value have no effect on balance sheet/IS until sold  Acquisition; recognize at fair value (transaction costs)  Report at cost  Dividends recognized as dividend income  Disposal: difference between the original cost and final market is realized gain/loss reported on net income Amortized Cost Model  Used for investments in another firm's debt security  At acquisition, recognizes the cost of investment at fair value (transaction cost)  Report at amortized cost (recognize, interest receivable, interest income and discount/premium by adjusting carrying amount of investment)  Disposal: bring accrued interest and discount/premium amortization up to date and derecognize investment and report gain/loss on disposal in net income Sale of Investments  Discount (premium) is amortized from last dat
More Less

Related notes for AFM 291

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.