COB 241 Chapter Notes - Chapter E: Security Certificate, Historical Cost, Financial Statement
5 Oct 2016
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Investor: the entity that provides the assets and receives the security certificate. Investee: the entity that receives the assets or services and give the security certificate. Debt security: an investor receives when assets are loaned to the investee. Equity security: obtained when an investor acquires an ownership interest in the investee. Investment securities: certificates that describe the rights and privileges that investors receive when they loan or give assets or services to investees. Primary securities market: transactions between the investor and the investee constitute. Secondary securities market: investors exchange (buy and sell) investment securities with other investors. Marketable securities: securities that regularly trade in established secondary markets. Fair value: (market value) the amount that the investor would receive if the securities were sold in an orderly transaction. Investors exercising significant influence must account for their investment using the equity method. Investors that have a controlling interest in an investee company are required to issue consolidated financial statements.
