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International Financial Statement Analysis
book

International Financial Statement Analysis

by CFA Thomas R. Robinson, CFA Hennie van Greuning, CFA Elaine Henry, CFA Michael A. Broihahn
November 2008
Intermediate to advanced content levelIntermediate to advanced
859 pages
25h 22m
English
Wiley
Content preview from International Financial Statement Analysis
CHAPTER 15
INTERCORPORATE INVESTMENTS
Susan Perry Williams McIntire School of Commerce University of Virginia Charlottesville, Virginia

LEARNING OUTCOMES

After completing this chapter, you will be able to do the following:
• Explain the categorization of intercorporate investments into minority passive, minority active, joint ventures, and controlling interest.
• Describe the reporting under International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP) of the four categories of intercorporate investments including the use of different accounting methods: equity, proportionate consolidation, and consolidation; and including the treatment of goodwill.
• Contrast the purchase method, the pooling of interest method, and the acquisition method, used in business combinations and evaluate the impact of each method on reported financial results.
• Explain the implications on performance ratios of the different accounting methods used for intercorporate investments.
• Identify the accounting issues associated with special purpose entities (SPEs) or variable interest entities.

1. INTRODUCTION

Intercompany investments play a significant role in business activities. Diversification, entry into global markets, growth, and competitive opportunities lead many companies to make investments in other companies. Companies often invest in the marketable debt and equity securities of other companies. Debt securities include corporate and government ...
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Publisher Resources

ISBN: 9780470460122Purchase book