FAR Methods of Accounting for Investments
38.8 هزار بار بازدید -
15 سال پیش
-
Roger Philipp, CPA, CGMA, discusses
Roger Philipp, CPA, CGMA, discusses the three methods of accounting for investments.
This brief excerpt from the FAR section of the Roger CPA Review Online and USB course introduces the concepts of Cost Method or Marketable Securities, the Equity method and Consolidation.
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Video Transcript Sneak Peek:
So let's talk about the different kinds of investments that we can have. Now, this talks about how much stock you own a company, so it’s always dependent upon how much stock I own a company. So, I could own 0 to 20%.
That's called the cost method or marketable securities. I could own 20 to 50%. That's called the equity method, also known the one line consolidation. I could have 50% plus. That is called consolidations. So it all depends how much stock I own in the company because depending upon how much stock I own, that tells us how we're going to account for the investment.
Alright, now if it’s 0 to 20%, that's called cost or marketable securities. If it’s 20 to 50, it’s called the equity method, which is kind of like consolidating, but you don't actually break out the detail, you consolidate in one line item called investment.
This brief excerpt from the FAR section of the Roger CPA Review Online and USB course introduces the concepts of Cost Method or Marketable Securities, the Equity method and Consolidation.
Connect with us:
Website: https://accounting.uworld.com/cpa-rev...
Blog: https://accounting.uworld.com/blog/cp...
Twitter: Twitter: UWorldRogerCPA
Facebook: Facebook: UWorldRogerCPAReview
Instagram: Instagram: uworldrogercpareview
Pinterest: Pinterest: uworldrogercpareview
LinkedIn: LinkedIn: uworld-roger-cpa-review
Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://accounting.uworld.com/cpa-rev...
Video Transcript Sneak Peek:
So let's talk about the different kinds of investments that we can have. Now, this talks about how much stock you own a company, so it’s always dependent upon how much stock I own a company. So, I could own 0 to 20%.
That's called the cost method or marketable securities. I could own 20 to 50%. That's called the equity method, also known the one line consolidation. I could have 50% plus. That is called consolidations. So it all depends how much stock I own in the company because depending upon how much stock I own, that tells us how we're going to account for the investment.
Alright, now if it’s 0 to 20%, that's called cost or marketable securities. If it’s 20 to 50, it’s called the equity method, which is kind of like consolidating, but you don't actually break out the detail, you consolidate in one line item called investment.
15 سال پیش
در تاریخ 1388/11/26 منتشر شده
است.
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