微观经济学investments(编辑修改稿)

微观经济学investments(编辑修改稿)内容摘要：

estment account PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 14 Dec 31 Cash 12 000 Investments in equity securities 12 000 (To record dividends received) Holdings of more than 50% • An entity that owns more than 50% of ordinary shares of another entity is called the parent pany • The entity whose shares are owned by the parent pany is called the subsidiary (affiliated) pany • The parent pany has a controlling influence in the subsidiary PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 15 LO4 Holdings of more than 50% continued • The parent pany usually prepares consolidated financial statements • These present – Total assets and liabilities controlled by the parent – Total ine and expenses of subsidiary • Individual assets and liabilities of subsidiary will be included in financial statements of the parent as well PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 16 VALUING AND REPORTING INVESTMENTS • Debt and equity investments could be valued at – cost – fair value – lower of cost and market rule • Fair value is the amount for which a security could be sold in a normal market • However, this may not be relevant unless security is to be sold soon PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 17 LO5 Categories of securities Type of Security Explanation Valuation Guidelines Trading Bought and sold At fair value with primarily for sale changes reported in near future to in profit generate ine Availableforsale Held with intent At fair value with of selling some changes reported time in the future in shareholders’ equity section until sold Heldtomaturity Debt securities At amortised cost that investor has using effective intent and ability interest method to hold to maturity PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 18 Trading securities • Reported at fair value • Changes from cost reported as part of profit • Changes are reported as unrealised gains or losses because securities have not been sold • Unrealised gain or loss is difference between total cost of trading securities and total fair value at reporting date PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 19 Trading securities continued Example – Cost and fair values for Pencil Ltd’s trading securities at 30 June 2020 – Adjusting entry at balance date PowerPoint presen。