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York University (12,784)
ADMS 3585 (22)
Liona Lai (6)

Summary of Accounting Methods for Investments.docx

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Administrative Studies
ADMS 3585
Liona Lai

ACCOUNTING FOR DEBT INSTRUMENTS IFRS ASPE Held to maturity; Cost/amortized cost Cost/amortized cost by default Contractual cash flows May use FVPL if correcting Can assign FVPL at recognition accounting mismatch at time of but cannot change anymore acquisition otherwise FVPL ACCOUNTING FOR EQUITY INSTRUMENTS IFRS ASPE No significant influence FVPL by default Quoted in active market – FVPL if held for strategic reasons, mayOtherwise, cost/amortized cost designate FVOCI w/ recycling at time of acquisition Associate Equity method  Equity method  Cost/amortized cost unless quoted in active market – FVPL One method for all associates Subsidiary Consolidated  Consolidated  Equity or Cost/amortized cost unless quoted in active market – FVPL One method for all subsidiaries SUMMARY OF ACCOUNTING METHODS FOR INVESTMENTS Measurement Dividends, interest, Impairment Method and (balance sheet) gains/losses (income Income Statement Effect statement) Cost/amortized Initial – FV (cost) + directrecognize dividends Incurred loss cost transaction fees (Dividend income) and - ASPE: use current interest (interest income) interest rate Subsequent – adjust for as income - IFRS: use original amortization and interest rate impairment loss upon sale, recognize gain/loss (gain/loss on Recognized in net income sale of investment) (loss on impairment) and can be reversed up to loss deducted FV-PL Initial – FV (cost) only I
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