课件IAChap012PPT

INVESTMENTS,Chapter12,2013TheMcGraw-HillCompanies,Inc.,NatureofInvestments,Investmentscanbeaccountedforinavarietyofways,dependingonthenatureoftheinvestmentrelationship.,ReportingCategoriesforInvestments,Held-to-MaturitySecurities,OnJanuary1,2012,MatrixLtdpurchasedasaninvestment$1,000,000,of10%,10-yearbonds,interestpaidsemi-annually.Themarketrateforsimilarbondsis12%.Letslookatcalculationofthepresentvalueofthebondissue.,PVofordinaryannuityof$1,n=20,i=6%,PVof$1,n=20,i=6%,Held-to-MaturitySecurities,PartialBondAmortizationTable,Held-to-MaturitySecurities,Howwouldthisinvestmentappearonthestatementoffinancialpositionafteroneperiodofdiscountamortization?,Held-to-MaturitySecurities,Held-to-MaturitySecurities,OnDecember31,2012afterinterestisreceivedbyMatrix,allthebondsaresoldfor$900,000cash.,LoansandReceivables,TradingSecurities,Adjustmentstofairvaluearerecorded:inavaluationaccountcalledFairValueAdjustment,orasadirectadjustmenttotheinvestmentaccount.asanetunrealizedgain/lossontheIncomeStatement.,UnrealizedGain,UnrealizedLoss,IncomeStatement,TradingSecurities,MatrixLtdpurchasedadditionalsecuritiesclassifiedasTradingSecurities(TS)attheendof2012.ThefairvalueamountsforthesesecuritiesonDecember31,2012,areshownbelow.PreparethejournalentriesforMatrixLtdtoadjustthesecuritiestofairvalueat12/31/12.,TradingSecurities,NetUnrealizedLossisreportedontheIncomeStatement.,TradingSecurities,Unrealizedgainsandlossesfromtradingsecuritiesarereportedontheincomestatement.,TradingSecurities,OnJanuary3,2013,MatrixLtdsoldalltradingsecuritiesfor$65,000cash.,Available-for-SaleSecurities,Adjustmentstofairvaluearerecorded:inavaluationaccountcalledFairValueAdjustment,orasadirectadjustmenttotheinvestmentaccount.asanetunrealizedgain/lossinOtherComprehensiveIncome(OCI),whichaccumulatesinseparateOCIcomponentsinequity.,UnrealizedGain,UnrealizedLoss,OtherComprehensiveIncome,OtherComprehensiveIncome(OCI),Whenweaddothercomprehensiveincometonetincomewerefertotheresultas“comprehensiveincome.”,AccumulatingOtherComprehensiveIncome,Unrealizedgainsandlossesonavailable-for-salesecuritiesareaccumulatedinseparateOCIcomponentsoftheshareholdersequitysectionofthestatementofcomprehensiveincome.,ShareholdersEquityOrdinarysharesUnrealizedgainsonAFSinstrumentsRetainedearningsTotalShareholdersEquity,Cumulativenetunrealizedgainsandlosses,ExampleofAvailable-for-salesecurities,NowassumethesamefactsforourMatrixLtd.example,exceptthattheinvestmentisforavailable-for-salesecuritiesratherthantradingsecurities.,ExampleofAvailable-for-salesecurities,ReclassificationAdjustmentWhenAFSInvestmentsareSold,OnJanuary3,2013,MatrixLtdsoldallavailable-for-salesecuritiesfor$65,000cash.,Available-for-SaleSecurities,ImpairmentofInvestments,Thislossinvalueiscalledan.,Occasionally,aninvestmentsvaluewilldeclineinlightofalossevent,ImpairmentLoss,ImpairmentofInvestments,FairValueOption,*U.S.GAAPallowsfortheunconditionaluseofthefairvalueoption,TransfersBetweenReportingCategories,Unrealizedgainsorlossesatreclassificationshouldbeaccountedforinamannerconsistentwiththeclassificationintowhichthesecurityisbeingtransferred.,Transfersareaccountedforatfairvalueonthetransferdate.,LimitedCircumstances!,TransfersBetweenReportingCategories,Disclosuresoffinancialinstruments(FI),InvestorHasSignificantInfluence,InvestorHasSignificantInfluence,WhatIsSignificantInfluence?,Ifaninvestorowns20%ofthevotingrightsofaninvestee,itispresumedthattheinvestorhassignificantinfluenceoverthefinancialandoperatingpoliciesoftheinvestee.Thepresumptioncanbeovercomeif,forexample:theinvesteechallengestheinvestorsabilitytoexercisesignificantinfluencethroughlitigationorothermethods.theinvestorsurrenderssignificantshareholderrightsinasignedagreement.theinvestorisunabletoacquiresufficientinformationabouttheinvesteetoapplytheequitymethod.theinvestortriesandfailstoobtainrepresentationontheboardofdirectorsoftheinvestee.,EquityMethodandConsolidation,Theequitymethodisusedwhenaninvestorcantcontrol,butcan“significantlyinfluence”theinvestee:ControlhastwokeyfeaturesinIASNo.27Thepowertogoverntheoperatingandfinancialpoliciesoftheinvestees,andTherightstothebenefitsfromtheinvesteesactivitiesAlthoughtheconceptofcontrolisqualitativeinnature,anentityis“presumed”tohavecontrolifitownsmorethan50%ofaninvesteesissuedorpartialordinaryshares.Departurefromthisqualitativethresholdisallowed,butitmustbedisclosedandexplained,EquityMethodandConsolidation,A“parent”and“subsidiary”relationshipexistswhenainvestorcontrolsaninvestee.Theparentandsubsidiaryareconsideredasinglereportingentity.Consolidatedfinancialstatementscombinetheseparatefinancialstatementsoftheparentandsubsidiaryeachperiodintoasingleaggregatesetoffinancialstatements.Theequitymethodissometimesreferredtoasa“onelineconsolidation,”becauseitshowstheinvestorsincomeandinvestmentasincreasingbytheirportionoftheinvesteesincome.,EquityMethod,Theinvestmentaccountisincreasedby:Originalinvestmentcost.Proportionateshareofinvesteesearnings.Theinvestmentaccountisdecreasedby:Dividendsreceived.,EquityMethodExample1,OnJanuary1,2012,MatrixLtdacquired45%oftheequitysecuritiesofApexLtd.for$1,350,000.Ontheinvestmentdate,Apexsnetassetshadafairvalueof$3,000,000.During2012,Apexpaidcashdividendsof$150,000andreportednetincomeof$1,750,000.WhatamountwillMatrixLtd.reportonthestatementoffinancialpositionasInvestmentinApexLtd?Ignoretaxes.,EquityMethod,EquityMethod,EquityMethod,InvestmentinApexLtd.,Investment1,350,00067,50045%Dividends45%Earnings787,500Reportedamount2,070,000,Iftheinvesteehadaloss,theinvestmentaccountwouldhavebeenreduced.,EquityMethod-Example2,OnJanuary1,2012,MatrixLtdpurchase25%oftheordinarysharesofApexLtd.for$180,000.Atthedateofinvestment,thebookvalueofthenetassetsofApexwas$400,000,andthenetfairvalueoftheseassetsis$600,000.During2012,Apexpaidcashdividendsof$40,000,andreportedearningsof$100,000.,EquityMethod,Assumethatofthe$50,000excessofthefairvalueofnetassetsacquired($600,00025%=$150,000)overthebookvalueofthosenetassetsonApexsstatementoffinancialposition($400,00025%=$100,000),75%isattributabletodepreciableassetswitharemaininglifeof20yearsandtheremainderisattributabletoland.Matrixusesthestraight-linemethodofdepreciationonsimilarownedassets.,EquityMethod,Goodwillis“implicit”orembeddedintheinvestment,ChangingFromtheEquityMethodtoAnotherMethod,Thenewmethod(forexample,fairvalue)isappliedtotheinvestmentfromthatpointonwards,Whentheinvestorslevelofinfluencechanges,itmaybenecessarytochangefromtheequitymethodtoanothermethodintheconsolidatedfinancialstatements.,ChangingFromtheEquityMethodtoAnotherMethod,Theequitymethodissimplydiscontinuedandthenewmethodappliedfromthenon.Forexample,ifthereisalossofsignificantinfluence,theinvestmentisaccountedforasafinancialinstrumentunderIAS39henceforth),ChangingFromAnotherMethodtotheEquityMethod,Whentheinvestorsownershiplevelincreasestothepointwheretheycanexertsignificantinfluence,theinvestorshouldchangetotheequitymethod.Theinvestmentaccountwouldnotberetroactivelyadjustedtothebalancethatwouldhaveexistediftheequitymethodhadalwaysbeenused.Theequitymethodwouldbeappliedtotheprofitsoftheassociateonlyfromthedatewhentheinvestorisabletoexertsignificantinfluenceovertheinvestee,ComparisonofCost,FairValue,andEquityMethod,Thedifferenceintermsofincomebetweenthecost,fairvalueandequitymethodsliesinthetimingatwhichgainsorlossesarerecognizedThehigherincomeearnedinanearlierperiodundertheequitymethodisoffsetbyalowerterminalprofit(orhigherterminalloss)atthedateofsale,ProportionalConsolidation,FinancialInstrumentsorAcontractualrighttoreceiveavariablenumberoftheentitysownequityinstruments.,FinancialInstrumentsorAcontractualobligationtoissueavariablequantityoftheentitysownequityinstruments.,Derivatives:Financialinstrumentsthat“derive”theirvaluesorcontractuallyrequiredcashflowsfromsomeothersecurityorindex.,Appendix12AOtherInvestments,Itisacommonpracticeforcompaniestopurchaselifeinsurancepoliciesonkeyofficers.Thecompanypaysthepremi