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Investments in financial instruments

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INVESTMENTS IN FINANCIAL INSTRUMENTS Discussion Notes
a) Control Exists (>50% equity in voting shares) Investment in Subsidiary
b) Significant Influence Exists (20%-50% in voting shares) Investment in Associate (Equity
Method)
c) No Control nor Significant Influence Financial Asset at Fair Value
a. Financial asset at fair value through profit or loss (Trading)
b. Financial asset at fair value through other comprehensive income or loss (Available for
Sale)
Investment in Associate (Equity Method)
- At cost adjusted for share in the post-acquisition changes in the net assets (capital) of the
associate
Beginning Balance (Cost of Acquisition)
xx
Share from dividends
(xx)
Share in net income/ (net loss)**
xx(xx)
Share in the other comprehensive income/(losses) of the associate
xx(xx)
Ending Balance
xx
**Share in net income/ (net loss):
Associate’s Net income/(loss)
xx
Multiply by % of interest
x%
xx
Less: Effect of excess of fair value over
book value of identifiable net assets:
Depreciable asset
understatement/remaining life
(xx)
Current asset understatement
(xx)
Current liability overstatement
(xx)
Adjusted share in net income/(loss)
xx
Notes:
1. Excess of acquisition cost over fair value of identifiable asset (Goodwill) shall
not be included in the computation of share in net income/(loss), except if
there is an impairment.
2. Excess of fair value over book value of non-depreciable asset (Land) shall not
be included in the computation of share in net income/loss, except if there is
an impairment.
3. If the acquisition cost is lower than the FMV of identifiable asset, the negative
excess shall be included (added) in the share in net income in the year of
acquisition.

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4. If investment was acquired other than at the beginning of the year, share in
net income should be proportionate to the number of months the investment
has been held.

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INVESTMENTS IN FINANCIAL INSTRUMENTS – Discussion Notes a) Control Exists (>50% equity in voting shares) – Investment in Subsidiary b) Significant Influence Exists (20%-50% in voting shares) – Investment in Associate (Equity Method) c) No Control nor Significant Influence – Financial Asset at Fair Value a. Financial asset at fair value through profit or loss (Trading) b. Financial asset at fair value through other comprehensive income or loss (Available for Sale) Investment in Associate (Equity Method) - At cost adjusted for share in the post-acquisition changes in the net assets (capital) of the associate Beginning Balance (Cost of Acquisition) Share from dividends Share in net income/ (net loss)** Share in the other comprehensive income/(losses) of the associate Ending Balance xx (xx) xx(xx) xx(xx) xx **Share in net income/ (net loss): Associate’s Net income/(loss) Multiply by % of interest Less: Effect of excess of fair value over book value of identifiable net assets: Depreciable asset understatement/remaining life Current asset understatement Current liability overstatement Adjusted share in net income/(loss) xx x% xx (xx) (xx) (xx) xx Notes: 1. Excess of acquisition cost over fair value of identifiable asset (Goodwill) shall not be included in the computation of share in net income/(loss), except if there is an impairment. 2. Excess of fair value over book value of non-depreciable asset (Land) shall not be included in the computation of share in net i ...
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