Term
Why invest in securities by other companies? |
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Definition
1. Earn high rate of return 2. Secure certain operating or financing arrangements with another company |
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Term
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Definition
Represents a creditor relationship with another entity |
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Term
What are held-to-maturity securities? |
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Definition
Debt securities that the company has 1. the positive intent 2. The ability to hold to maturity. |
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Term
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Definition
Debt securities bought and held primarily for sale in the near term to generate income on short-term price differences |
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Term
Available-for-sale define |
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Definition
Debt securities not classified as held-to-maturity or trading securities |
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Term
What kind of securities can be classified as held-to-maturity? |
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Definition
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Term
What are held-to-maturity securities accounted for at? (amortized cost or fair value) |
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Definition
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Term
What are the 5 examples of debt securities? |
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Definition
U.S. Government securities Municipal Securities Corporate Bonds Convertible Debts Commercial Paper |
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Term
How do companies report available-for-sale securities? is it on the BS or the Income Statement? When is it realized |
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Definition
They record it on the Balance sheet, and then only on the income statement when it is realized. |
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Term
What statement (income or equity) is adjusted when using available for sale? |
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Definition
The equity of UNREALIZED HOLDINGS GAIN OR LOSS - EQUITY |
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Term
What statement (income or equity) is adjusted when using trading securities? |
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Definition
The equity of UNREALIZED HOLDINGS GAIN OR LOSS - INCOME |
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Term
What are Available-for-sale securities accounted for at? |
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Definition
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Term
What are Trading securities accounted for at? |
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Definition
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Term
While having a 20% investment in another corporation what method do you use to report investments in equity securities? |
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Definition
Use the Fair Value method |
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Term
While having a 20%-50% investment in another corporation what method do you use to report investments in equity securities? |
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Definition
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Term
While having a 50+% investment in another corporation what method do you use to report investments in equity securities? |
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Definition
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Term
When a corporation owns more than 50% of a another corporation what is it called? |
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Definition
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Term
When a corporation is owned by another corporation with more than 50% control over them what are they called? |
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Definition
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Term
Where are investments reported on the books at? |
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Definition
The parent company's long-term investments |
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