文档介绍：Intermediate Accounting 15 Debt and Equity Investments
Debt and Equity Investments
Chapter
15
Investments in Debt Securities
Investments in Equity Securities
Other Reporting Issues
Held-to-maturity securities
Available-for-sale securities
Trading securities
Holdings of less than 20%
Holdings between 20% and 50%
Holdings of more than 50%
Financial statement presentation
Impairment of value
Transfers between categories
Fair value controversy
Investments
Different motivations for investing:
To earn a high rate of return3>.
To secure certain operating or financing arrangements with pany.
Investments
Companies account for investments based on
the type of security (debt or equity) and
their intent with respect to the investment.
Investments
Illustration 17-1
LO 1 Identify the three categories of debt securities and describe the accounting and reporting treatment for each category.
Debt securities (creditor relationship):
Investments in Debt Securities
. government securities
Municipal securities
Corporate bonds
Convertible debt
Commercial paper
Type
Held-to-maturity
Trading
Available-for-sale
Accounting Category
LO 1 Identify the three categories of debt securities and describe the accounting and reporting treatment for each category.
Investments in Debt Securities
Accounting for Debt Securities by Category
Illustration 17-2
Held-to-Maturity Securities
Classify a debt security as held-to-maturity only if it has both
the positive intent and
the ability to hold securities to maturity.
Accounted for at amortized cost, not fair value.
Amortize premium or discount using the effective-interest method unless the straight-line method—yields a similar result.
LO 2 Understand the procedures for discount and premium amortization on bond investments.
E17-3 (Held-to-Maturity Securities) On January 1, 2006, Hi and pany purchased 12% bonds, having a maturity value of $300,000, for $322,744. The bonds provide the bondholders with