标题: 2 questions on investments please [打印本页] 作者: luckygiftvn 时间: 2013-4-22 08:31 标题: 2 questions on investments please
For equity method, the carrying value goes up by amount of net income and declines by dividends
For available-for sale securities, change in mkt value is in OCI but do you reduce carrying value due to dividends? Or is interest and dividends reflected in income statement?作者: maxmeomeo 时间: 2013-4-22 08:31
I think AFS div + interest in net income. But trying to be sure that changes in value are only in OCI to balance the Balance sheet
the only securities that change in value from dividends is equity method investments
is that right?作者: jcfa2011 时间: 2013-4-22 08:32
99% sure that avail for sale is:
B/S: FMV + Unrealized Gains/Losses
I/S: Intereset, Dividends, Realized Gains.
someone please confirm作者: YAhmed 时间: 2013-4-22 08:32
I would think no, because you do not include net income amount from your investment.作者: gjcxc 时间: 2013-4-22 08:33
Available for sale is a stock… It doesn’t have direct relationship with NI of the other firm. It has to do with market value of the stock. Stock goes up unrealized gain goes up. Dividend will be added to ur firms NI作者: pawn 时间: 2013-4-22 08:33
but as soon as it is deemed you have significant influence, you use equity method and thus the firm’s income and dividend will change you investment carrying amount.
interest hits your P&L作者: nitoha 时间: 2013-4-22 08:34
But that has nothing to do with available for sale. It’s cant be both equity and available for sale. So I don’t get the response.作者: morebeans 时间: 2013-4-22 08:34
I think Andy has a point, if you accumulate large enough position that you are able have significant influence then you have to use equity method. IMO
Gud Luk!!作者: Spongebob 时间: 2013-4-22 08:35
i think significant influence has more to do with board representation and the like. there is specific mention in the text that a large position alone (above 20%) does not represent significant influence in itself
