Wiley GAAP 2013: Interpretation and Application of Generally Accepted Accounting Principles

CHAPTER 9

INVESTMENTS—DEBT AND EQUITY

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Debt Securities and Equity Securities with Readily Determinable Fair Values

Fair Value Readily Determinable

Classification

Held-to-Maturity Debt Securities

Maturity date

Trading Securities

Available-for-Sale Securities

Deferred Income Tax Effects

Transfers between Categories

Other-than-Temporary Impairment (OTTI)

Unit of accounting

Step 1—Determine whether the investment is impaired

Step 2—Evaluate whether the impairment is other than temporary

Recognition of other-than-temporary impairment

Subsequent measurement after recognition of an OTTI

Income statement presentation

Subsequent accounting for debt securities after recognition of OTTI

Cost-Method Investments

Presentation in the Statement of Cash Flows

Option Contracts

Fair Value Measurements, Disclosures, and Elections

Changes in fair value after the date of the statement of financial position

Deferred income tax effects of changes in the fair value of debt and marketable equity securities

Other guidance on accounting for investments

Implications of Accounting for Investments on the Reporting of Comprehensive Income

PERSPECTIVE AND ISSUES

Reporting entities have an unprecedented variety of financial products available to them to meet their short-term (and long-term) investing and risk management goals. These products have differing characteristics and present the investor with a wide range of returns and, of course, ...