BU487 Chapter Notes - Chapter 2: Stock Trader, Equity Method, Current Asset
Document Summary
This replaces the previously accepted cost- based method. Fv changes are reported in ni mandatory in 2015: investments not held for short-term trading can initially record fv changes in oci, therefore, gains and losses are never recycled through. Ni (avoids a p/l loss on a risky investment). Nonstrategic investments: fvtpl, fvtoci (risky investment, afs. * no venture can exercise unilateral control as determined through a contractual arrangement: control, consolidation. Includes unrealized gains/losses on certain equity investments and exchange gains/losses related to certain hedges of foreign currency translations and types of foreign operations: fvtpl: Investments held for short-term trading with no influence: classified as current assets; assumed to be actively traded and sold within 1 year. Initially and subsequently (at each reporting date) measured at fv: unrealized gains/losses and dividends are reported in ni, when trading in investments is part of the firm"s short-term operating strategy, management should be evaluated on performance.
