intermediate accounting investments

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1、ConfirmingPagesCHAPTER12InvestmentsOVERVIEWInthischapteryouwilllearnaboutvariousapproachesusedtoaccountforinvest-mentsthatcompaniesmakeinthedebtandequityofothercompanies.Aninvestingcompanyalwayshastheoptiontoaccountfortheseinvestmentsatfairvalue,withchanges

2、infairvaluesreportedontheincomestatement.However,dependingonthenatureofaninvestment,investorscanusealternativeaccountingapproachesthatignoremostfairvaluechanges(e.g.,held-to-maturityinvestments)orthatincludefairvaluechangesonlyinothercomprehensiveincome(e.g

3、.,available-for-saleinvest-ments).And,whenanequityinvestorcansignificantlyinfluenceaninvesteebutdoesnotcontrolit,theinvestorcanusetheequitymethodofaccounting,whichignoresfairvaluechangesbutincludestheinvestee’sincomewhenreportingtheinvestor’sincome.Inappend

4、icestothischapter,youwilllearnaboutothertypesofinvestments,andalsoabouthowtodealwithother-than-temporarilyimpair-ments.ThechapterconcludeswithaWhereWe’reHeadedSupplementexplainingindetailaproposedAccountingStandardsUpdate(hereafter,“theproposedASU”)thattheF

5、ASBplanstoissuein2012thatsubstantiallychangeshowweaccountforinvestments.LEARNINGAfterstudyingthischapter,youshouldbeableto:OBJECTIVES●LO12–1Demonstratehowtoidentifyandaccountforinvestmentsclassifiedforreportingpurposesasheld-to-maturity.(p.656)●LO12–2Demons

6、tratehowtoidentifyandaccountforinvestmentsclassifiedforreportingpurposesastradingsecurities.(p.659)●LO12–3Demonstratehowtoidentifyandaccountforinvestmentsclassifiedforreportingpurposesasavailable-for-salesecurities.(p.663)●LO12–4Explainwhatconstitutessignif

7、icantinfluencebytheinvestorovertheoperatingandfinancialpoliciesoftheinvestee.(p.680)●LO12–5Demonstratehowtoaccountforinvestmentsaccountedforundertheequitymethod.(p.680)●LO12–6Explaintheadjustmentsmadeintheequitymethodwhenthefairvalueofthenetassetsunderlying

8、aninvestmentexceedstheirbookvalueatacquisition.(p.682)●LO12–7Explainhowelectingthefairvalueoptionaffectsaccountingforinvestments.(pp.672and688)●LO12–8DiscusstheprimarydifferencesbetweenU.S.GAAPandIFRSw