BU487 Chapter Notes - Chapter 2: Equity Method, Liquidating Distribution, Financial Statement
Document Summary
Equity investments are investments in shares of another company. Investor intends to establish a long term operating relationship with the entity in which the investment is made and has some level of influence over the strategic decisions of the investee company: nonstrategic: Investor is hoping for a reasonable rate of return without wanting or having the ability to play an active role in the strategic decisions of the investee company. 2018: nonstrategic investments in private companies must be reported at fair value. Available for sale investments have been eliminated as a separate category of investments. Unrealized gains and losses are reported in net income for fvtpl investments. Unrealized gains and losses are reported in oci for fvtoci investments. The investment is reported at fair value at each reporting date under both methods of reporting. The credit side of the entry is shown in brackets.
