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level: Investments

Questions and Answers List

Question	Answer
Trading Debt Security: Current or Not Current? Measurement? Unrealized G/L? Realized G/L? Credit Loss Treatment?	Current, FV@BS Date (Mark 2 Mkt), IS, IS, N/A
Available-for-Sale (AFS) Debt Security: Current or Not Current? Measurement? Unrealized G/L? Realized G/L? Credit Loss Treatment?	Current, FV@BS Date (Compared to Cost), OCI, IS, Amortized Cost - PV = Credit Loss on IS (excess over FV goes to OCI)
Held-to-Maturity (HTM) Debt Security: Current or Not Current? Measurement? Unrealized G/L? Realized G/L? Credit Loss Treatment?	Both, Amortized Cost, N/A, N/A, Amortized Cost - PV = Credit Loss on IS
When is the FV Method used in Investments?	Ownership of 0-20% (Not Significant)
When is the Equity Method used in Investments?	Ownership of 20-50% (Significant Influence)
Equity Method: How does each influence "Investment"? 1) Initial 2) Net Income 3) Dividends 4) FV Adjustment	1) Initial: Full Investment = Increase 2) Net Income: % Owned = Increase 3) Dividends: % Owned = Decrease 4) FV Adjust: % Owned = Increase/Decrease
Equity Method: How does each influence "Equity"? 1) Initial 2) Net Income 3) Dividends 4) FV Adjustment	1) Initial: N/A 2) Net Income: % Owned = Increase 3) Dividends: N/A 4) FV Adjust: % Owned = Increase/Decrease
Dividend Income is only found using the ??? Method of Investments	Fair Value Method
How do you calculate goodwill?	Implied FV (Initial Investment / %) - Fair Value = GW