Summary: Accounting for Investments

Initial Measurement
Total Acquisition Costs
FV at acquisition / Transaction Cost
Asset Transction Price/ FV of Transaction as Outright
Classification consideration given Costs Expense

Acquisition by exchange, acquisition cost is determined by

reference to the following in order of priority: 1st -
FV of asset given; 2nd - FV of asset received; 3rd - carrying
amount of asset given
Equity Investments
Lumpsum acquisition: Single cost of acquisition is alllocated
to the securities based on: 1. fmv is known; 2. to security
with known fmv first and the balance to securties with no
known fmv;

Held for Trading Securities

/Trading Securities / Financial Current √ √
Asset - FVPL

Not Held for Trading at FVPL √ √

Not Held for Trading at FVOCI by Non-current

irrevocable election √ √

All other investments in QUOTED

equity instruments at FVPL √ √

Investment in UNQUOTED equity

instruments √ √
Investments of 20% to 50% Non-
or Investment in Associate Current √ √

Investments of more than

50% or Investment in Non-
Subsidiary Current √ √
 Journal Entries

Subsequent
Measurement
Acquisition Change in FV at Yr end (FV Increase)

Trading Securities xxx Trading Securities xxx

Expense (Transaction Costs) xxx Unrealized Gain - TS xxx
FVPL
Cash xxx End of Yr1: FV Acquisition vs FV Yr1 End
Subsequent: FV CY - FV PY

Financial Asset - FVPL xxx Financial Asset - FVPL xxx

Expense (Transaction Costs) xxx Unrealized Gain - TS xxx
FVPL
Cash xxx End of Yr1: FV Acquisition vs FV Yr1 End
Subsequent: FV CY - FV PY

Financial Asset - FVOCI xxx Financial Asset - FVOCI xxx

Cash (FV + Trasaction Costs) xxx Unrealized Gain - OCI xxx
FV CY - FV Acquisition = Required Balance of OCI
Required Balance of OCI VS Balance before Adjustment = Unrealized Gain/Lo
FVOCI

Financial Asset - FVPL xxx Financial Asset - FVPL xxx

Expense (Transaction Costs) xxx Unrealized Gain - TS xxx
FVPL
Cash xxx End of Yr1: FV Acquisition vs FV Yr1 End
Subsequent: FV CY - FV PY

COST if FV cannot Investment in Shares xxx

be measured Cash xxx Change in FV not accounted
reliably
INITIALLY AT COST; Refer to Tab
THEN USING
EQUITY METHOD

Will be discus
CONSOLIDATION
 Journal Entries

Change in FV at Yr end (FV Decrease) Sale (SP > CA) Sale (SP < CA)

Urealized Loss - TS xxx Cash xxx Cash xxx

Trading Securities xxx Trading Securities xxx Loss on Sale of TS xxx
f Yr1: FV Acquisition vs FV Yr1 End Gain on sale of TS xxx Trading Securities xxx
Subsequent: FV CY - FV PY

Urealized Loss - TS xxx Cash xxx Cash xxx

Financial Asset - FVPL xxx Financial Asset - FVPL xxx Loss on Sale of TS xxx
f Yr1: FV Acquisition vs FV Yr1 End Gain on sale of TS xxx Financial Asset - FVPL xxx
Subsequent: FV CY - FV PY

Unrealized Gain - OCI xxx Cash xxx Cash xxx

Financial Asset - OCI xxx Financial Asset - OCI xxx Retained Earnings xxx
Acquisition = Required Balance of OCI Retained Earnings xxx Financial Asset - OCI xxx
alance before Adjustment = Unrealized Gain/Loss Adjustment
To transfer cumulative OCI: To transfer cumulative OCI:
Unrealized Gain - OCI xxx Unrealized Gain - OCI xxx
Retained Earnings xxx Retained Earnings xxx
or or
Retained Earnings xxx Retained Earnings xxx
Unrealized Loss - OCI xxx Unrealized Loss - OCI xxx

Urealized Loss - TS xxx Cash xxx Cash xxx

Financial Asset - FVPL xxx Financial Asset - FVPL xxx Loss on Sale of TS xxx
f Yr1: FV Acquisition vs FV Yr1 End Gain on sale of TS xxx Financial Asset - FVPL xxx
Subsequent: FV CY - FV PY

Cash xxx Cash xxx

Change in FV not accounted Investment in Shares xxx Loss on Sale of Investment xxx
Gain on Sale of Inv xxx Investment in Shares xxx
 Refer to Tab for Associate

Will be discussed in Advanced Accounting

 Impairment
Assessment Dividends

Dividend
Not necessary Income
because FA is
reported at FV

Dividend
Not necessary Income
because FA is
reported at FV

Not necessary
Dividend
because FA is
Income
reported at FV

Dividend
Not necessary Income
because FA is
reported at FV

Subject to Dividend
Impairment Income
Assessment
Dividend
Income
Unrealized Gain (Loss) - OCI
Case 1: Fair Value is Increasing

Required
Balance
Unrealized Unrealized Adjustment to
FV Gain - OCI Gain OCI - PY OCI (Addition)
Acquisition 1,000,000.00
Yr 1 1,100,000.00 100,000.00 - 100,000.00
Yr 2 1,300,000.00 300,000.00 100,000.00 200,000.00
Yr 3 1,600,000.00 600,000.00 300,000.00 300,000.00

Case 2: FV is decreasing

Required
Balance
Unrealized Unrealized Adjustment to
FV Loss - OCI Gain OCI - PY OCI (Addition)
Acquisition 1,000,000.00
Yr 1 900,000.00 100,000.00 - 100,000.00
Yr 2 850,000.00 150,000.00 100,000.00 50,000.00
Yr 3 700,000.00 300,000.00 150,000.00 150,000.00
Case 3: Fluctuating

Required
Balance
Unrealized Unrealized
Gain ( Loss) - Gain(Loss) Adjustment to
FV OCI OCI - PY OCI
Acquisition 1,000,000.00
Yr 1 900,000.00 (100,000.00) - (100,000.00)
Yr 2 1,050,000.00 50,000.00 (100,000.00) 150,000.00
Yr 3 850,000.00 (150,000.00) 50,000.00 (200,000.00)
 Unrealized Gain - OCI
Yr 1 100,000.00
Yr 2 200,000.00
Yr 3 300,000.00

AJE: Year 1 Year 2 Year 3

FA - FVOCI 100,000.00 200,000.00 300,000.00
Unrealized Gain - OCI 100,000.00 200,000.00

FA-FVOCI:
Acquisition 1,000,000.00
AJE - Year 1 100,000.00
Balance 1,100,000.00
AJE - Year 2 200,000.00
Balance 1,300,000.00
AJE - Year 3 300,000.00
Balance 1,600,000.00

Unrealized Loss - OCI

Yr 1 100,000.00
Yr 2 50,000.00
Yr 3 150,000.00

AJE: Year 1 Year 2 Year 3

Unrealized Loss - OCI 100,000.00 50,000.00 150,000.00
FA - FVOCI 100,000.00 50,000.00

FA-FVOCI:
Acquisition 1,000,000.00
AJE - Year 1 100,000.00
Balance 900,000.00
AJE - Year 2 50,000.00
Balance 850,000.00
AJE - Year 3 150,000.00
Balance 700,000.00

Unrealized Gain (Loss) - OCI

Yr 1 100,000.00 Yr 2 150,000.00
Yr 3 200,000.00 Balance 50,000.00
Balance 150,000.00

AJE: Year 1 Year 2

Unrealized Gain (Loss) - OCI 100,000.00
FA - FVOCI 100,000.00

FA - FVOCI 150,000.00
Unrealized Gain (Loss) - OCI

FA-FVOCI:
Acquisition 1,000,000.00
AJE - Year 1 (100,000.00)
Balance 900,000.00
AJE - Year 2 150,000.00
Balance 1,050,000.00
AJE - Year 3 (200,000.00)
Balance 850,000.00
Year 3

300,000.00

Year 3

150,000.00
Year 2 Year 3
200,000.00
200,000.00

150,000.00
ACCOUNTING FOR DIVIDENDS:
Type of Dividends Date of Record Date of Payment
Dividends Receivable xxx Cash xxx
A. Cash Dividends
Dividend Income xxx Dividend Receivable xxx

Dividends Receviable xxx Non-Cash Asset xxx

B. Property Dividends Dividend Income xxx Dividend Receivable xxx
(Noncash Asset @ Fair Value)

C. Share Dividend of Same NOT INCOME! Memorandum entry only; Does not affect total cost of investment but reduce the cost of investment per share.
Class

Supporting Computation:
NOT INCOME! Memorandum entry only; However, original cost of investment is allocated to Those Originally Held and to Share Dividends
Received on the basis of their Market Values.
D. Share Dividend Different Fair Values Fraction Cost Allocation
from Those Held Investment in PS xxx OS shares x fv FV OS / Total FV x CA of Investment to OS
Investment in OS xxx PS shares x fv FV PS / Tofal FV x CA of Investment to PS
Total FV

Recognized as income: Priority 1 - at FV of shares received; Priority 2 - @ cash dividends that would have been received
E. Shares Received in Lieu of
Cash Investment in Shares xxx
Dividend Income xxx

Follow the "as if" approach; i.e. as if the dividends are received and subsequently sold at the cash received. Thus, a gain or loss may be
recognized.

F. Cash Received in Lieu of Cash (cash received) xxx BIR Approach:

Share Dividends
Investment in Shares ((original cost /( original
shares + share dividends to be received)) x share
dividends to be received xxx Cash xxx
Gain on Investment xxx Dividend Income xxx

NOT INCOME! Represent return of invested capital.

Cash xxx
Investment in Shares xxx
G. Liquidating Dividend
For Wasting Assets Corporation, dividends designated partly as
income and partly as return of capital:
Cash xxx
Dividend Income xxx
Investment in Shares xxx

SALE OF INVESTMENTS AFTER DATE OF DECLARATION BUT BEFORE DATE OF RECORD ("DIVIDENDS ON")
Selling Price xxx Cash xxx
Less: Dividend Income xxx Investment in Sharess xxx
Selling Price Attributable to Investment xxx Dividend Income xxx
Less: Carrying Amount of Investment xxx Gain on Sale of Investments xxx
Gain (Loss) on Sale of Investment xxx
 Split up
outstanding shares
are called in and
capital restructuring replaced by a
effected by a change LARGER NUMBER OF
in the number of SHARES
Share shares without
Split capitalizing retained
earnings or changing
the amount of
capital outstanding shares
are called in and

down
replaced by a

Split
SMALLER NUMBER
OF SHARES

ONLY MEMORANDUM ENTRY IS MADE TO RECORD RECEIPT OF NEW SHARES BY V

e.g. "Received 20,000 new shares as a result of a 2-for-1 split of 10,000 o
 Reduction in Par or Decrease in Cost or for example, can be
Stated Value per Carrying Amount Per expressed as:
Share Share " 2 FOR 1"

Increase in Par or Increase in Cost or for example, can be

Stated Value Per Carrying Amount Per expressed as:
Share Share " 2 TO 1"

RECEIPT OF NEW SHARES BY VIRTUE OF SHARE SPLITS.

lt of a 2-for-1 split of 10,000 original shares."
 On the part of the
Special Additional capital shareholders /
Will increase the
contribution of the investors, this is an
Assessments shareholders additional cost of
Cost per Share
investment

Journal Entry to Record Payment of Special Assessments:

Investment in Shares xxx
Cash
Will increase the
Cost per Share

xxx

Shares, particularly
Redemption PS, amy be called in
for redemption and
of Shares cancellation by the
issuing company.
On the part of the
shareholders /
investors, the
Redemption Price
redemption is
recorded in the
= Selling Price
same manner as sale
of share.

Journal Entry to Record Redemption of Shares:

Cash (Redemption Price) xxx
Investment in Shares (Carrying Amount)
Gain on Investment (Redemption Price - Carrying Amount)
Redemption Price
= Selling Price

xxx
xxx
 Legal right granted to shareholders to subscribe for Accounted for Separately (As stand-a
new hsares issued by a corporation at a specified
Original Shares
price during a definite period
A Two financial assets
c Share Rights

Share Rights
Inherent in every share
c
or o
Pre- u
emptive 1 share owned = 1 right measured initially at
Rights n fair value
or t
Rights Issue
ownership is evidenced by share warrants i √Not Accounted for Separately (As an em
n Host Contract -
g Original Shares
One Financial Asset
Valuable to shareholder because the price at which Derivative - Share
the new shares are sold is generally below the Rights
prevailing market price
parately (As stand-alone derivatives) date when BOD aproved the
Date of Declaration issuance of share rights
Original Shares Carrying Amount is
allocated between
share and share
Share Rights rights

date on which the stock and

Important transfer book of the entity will
Date of record be closed for registration; also
Dates for the date of issuing share
measured initially at Share warrants
fair value Warrants
Accounting

eparately (As an embedded derivatives)

Host Contract -
Original Shares date up to which the share
One Carrying rights shall be exericed; after
Amount; i.e. not Date of Expiration
this date, the share rights will
Derivative - Share allocated between be worthless
Rights shares and share
rights
 Shares are selling Sale of investment:
RIGHT-0N; share
and rights are
inseparable and Cash xxx
treated as one Investment in Share xxx
Gain on Sale of Investment xxx original investment
Investment in Shares

Accounted for Separately Cash

Sharess are selling
EX-RIGHT; share Accounting depends on whether the share
can be sold rights is:
separately from the
rights Not Accounted for Separately

original investment
Investment in Shares xxx
Cash xxx

receipt of share rights

Memo Entry Only. Example:
Received 10,000 share rights to subscribe for new
shares at P100 per share for every five rights held.

expiration of share rights exercise of share rights sale of share righ

Memo Entry Only. Investment in Shares xxx Cash
Cash xxx Investment in Share
 sale of share rights
Cash xxx
Share Rights xxx
Gain on Sale of Share Rights xxx

original investment receipt of share rights share rights are exercises

nt in Shares xxx Share Rights xxx Investment in Shares xxx
xxx Investment in Shares xxx Share Rights xxx
Cash (Exercise Price) xxx

expiration of share rights

Loss on Share Rights xxx
Share Rights xxx

If NO MARKET VALUE, use the THEORETICAL Share is selling RIGHT ON

OR PARITY VALUE OF SHARE RIGHTS
Market Value of Share Right-On
Minus Subscription Price
Number of Rights to Purchase
= Value of One Right

assumed FV of the right that is derived from One Share + 1

the Market Value of the Share

Share is selling EX RIGHT

Market Value of Share Ex-Right

sale of share rights Minus Subscription Price
Cash xxx Number of Rights to Purchase
= Value of One Right
 = Value of One Right

Investment in Share xxx One Share

 Investment Income Computation: Investment Income Computation: Investment Income Computation:
Share in Income of Investee xxx Share in Income of Investee xxx Share in Income of Investee xxx
Share in Loss of Investee (xxx) Share in Loss of Investee (xxx) Share in Loss of Investee (xxx)
Investment Income xxx Amortization of Excess Cost - Land, PPE, (xxx) Amortization of Excess Cost - Land, PPE,
Invty Invty (xxx)
Investment Income xxx Amortization of Excess Net Fair Value
(Year of Acquisition Only) xxx
Investment Income xxx
should include investor's proportiona
arising from the changes in the inves
been recognized in Investee's P&L
Carrying Amount of Investment in Associate: Carrying Amount of Investment in Associate: Carrying Amount of Investment in Associate:
Acquisition Cost xxx Acquisition Cost xxx Acquisition Cost xxx
Share in Income of Investee xxx Share in Income of Investee xxx Share in Income of Investee xxx If the Investee has
Share in Loss of Investee (xxx) Share in Loss of Investee (xxx) Share in Loss of Investee (xxx) Net Income of Investee
Bonus Issue Received - Bonus Issue Received - Bonus Issue Received - Less: Preferred Dividend
(Automatic Deductio
Cash Dividend/Property Divided Received (xxx) Cash Dividend/Property Divided Received (xxx) Cash Dividend/Property Divided Received (xxx) If Non-Cumulative, Deduct
Investment in Associate, End xxx Amortization of Excess Cost - Land, PPE, Amortization of Excess Cost - Land, PPE, Declared)
Invty (xxx) Invty (xxx) Net Income to Ordinary Sh
Investment in Associate, End xxx Amortization of Excess Net Fair Value xxx x % of Ownership
Investment in Associate, End xxx Share in Income

Investee with Heavy Losses

Maximum Share in Loss = Balance of the Investment Account

Share in Loss > Balance of Investment Account, Not Currently Recognized;

This amount will reduce the amount of the Share in Income once the
Investee reports an Income

Impairment Loss: Carrying Amount of Investment > Recoverable Amount

Recoverable Amount
Higher Between
Fair Value Less Cost of Disposal
Value in Use

Value in Use
= PV of estimated cash flows expected to arise from the
continuing use of an asset and from its ultimate disposal
Either of the following:

PV of estimated future cash flows expected to be generated by

investee including cash flows from opeations of the investee
and the preoceeds on the ultimate disposal of the investment

PV of the estimated future cash flows expected to arise from

dividends to be received from the investment and from its
ultimate disposal
 Revaluation of PPE
should include investor's proportionate interest in the investee FOREX Transalation Differences
arising from the changes in the investee's equity that have NOT
been recognized in Investee's P&L OCI

If the Investee has Preference Shares:

Net Income of Investee xxx
Less: Preferred Dividend
(Automatic Deduction if Cumulative;
If Non-Cumulative, Deduct Only if
Declared) xxx
Net Income to Ordinary Shares xxx
x % of Ownership xxx
Share in Income xxx
Case 1:
Cost > Carrying Amount Cost > Fair Value of Net Assets Acquire

Carrying Amount 20,000,000 FV of Asset Acquired

x % Acquired 20% x % Acquired
CA Acquired 4,000,000.00 FV of Assets Acquired

Acquisition Price 5,000,000.00 Acquisition Price

CA Acquired 4,000,000.00 FV of Assets Acquired
Excess of Cost over CA 1,000,000.00 Excess of Cost over FV

Case 2:
Cost > Carrying Amount Cost < Fair Value of Net Assets Acquire
Carrying Amount 30,000,000.00 FV of Asset Acquired
x % Acquired 40% x % Acquired
CA Acquired 12,000,000.00 FV of Assets Acquired

Acquisition Price 15,000,000.00 Acquisition Price

CA Acquired 12,000,000.00 FV of Assets Acquired
Excess of Cost over CA 3,000,000.00 Excess of Cost over FV

INVESTEE WITH HEAVY LOSSES

Investee's Net
Income (Loss) % Owned Share in Income (Loss) Investment in Associate
Balance 5,000,000
2019 (1,000,000.00) 25% (250,000.00) 4,750,000.00
2020 (10,000,000.00) 25% (2,500,000.00) 2,250,000.00
2021 (12,000,000.00) 25% (3,000,000.00) (750,000.00)
2022 2,000,000.00 25% 500,000.00 (250,000.00)

2023 2,500,000.00 25% 625,000.00 375,000.00

Journal Entries:
2019 Loss on Investment 250,000.00
Investment in Associate 250,000.00

2020 Loss on Investment 2,500,000.00

Investment In Associate 2,500,000.00

2021 Loss on Investment 2,250,000.00 EVEN IF SHARE IS 3M, ONLY 2,2

Investment in Associate 2,250,000.00

2022 No Entry; Investment Account as of 12/31/21 is NIL or ZERO

2023 Investment in Associate 375,000.00
Investment Income 375,000.00
Fair Value of Net Assets Acquired

22,000,000
20%
4,400,000.00

5,000,000.00
4,400,000.00
600,000.00 = Goodwill; not amortized

Fair Value of Net Assets Acquired

39,500,000.00
40%
15,800,000.00

15,000,000.00
15,800,000.00
(800,000.00) = Amortized in the period the investment is acquired

Investment in
Notes Associate Balance
5,000,000
4,750,000.00
2,250,000.00
can't be negative; up to 2,250,000 share of loss can be recognized 0
the 500,000 share in income will be recognized as share in losses 0
out of 625,000 share in net income, 250,000 will be recognized as share in loss
and only 375,000 will be recognized as share in income 375,000.00

EVEN IF SHARE IS 3M, ONLY 2,250,000 OF LOSS WILL BE RECOGNIZED

 Adjustment of Investee's Operations

1. The most rescent available FS of the associate are

used by the investor in applying the equity method.

When reporting dates are different, the associate

shall prepare for the use of the investor, FS as of the
same date of the FS of the investor , unless
impractical to do so
The difference in reporting dates shall be NO MORE
THAN 3 MONTHS.
2. Accounting policies of the Investee should be
adjusted to conform with those of the investor
3. Profits and Losses resulting from Upstream and Upstream Transactions: Associate ---> Investor Upstream Transactions: Investor ---> Associate
Downstream Transactions should be eliminated.

Sales of Assets from Associate to Investor Sales of Assets from Investor to Associate

Unrealized profit from these transactions must be eliminated Unrealized profit from these transactions must be eliminated

Current Year/Year of Acquisition:

Net Income of Investee xxx
sale of inventory

Unrealized profit on Ending Inventory of Investor (xxx)

Adjusted Net Income xxx
Same
x % of Ownership xxx
Investor's Share in Net Income xxx

Subsequent Year:
Net Income of Investee xxx
Realized Profit in Beginning Inventory xxx
Adjusted Net Income xxx
Same
x % of Ownership xxx
Investor's Share in Net Income xxx

Current Year/Year of Acquisition:

Net Income of Investee xxx
Unrealized profit on Sale of Equipment of Investee (xxx)
sale of ppe

Realized profit on Sale of Equipment (Unrelized

Profit /Remaining EUL) xxx
Same
Adjusted Net Income xxx
x % of Ownership xxx
Investor's Share in Net Income xxx

Subsequent Year:
Net Income of Investee xxx
Realized profit on Sale of Equipment (Unrelized
Profit /Remaining EUL) xxx Same
Adjusted Net Income xxx
x % of Ownership xxx
Investor's Share in Net Income xxx
 When? To record the sale of portion of Investment To remeasure the remaining balance of To reclassify investment in Associate to Other type
Cash (Selling Price) xxx Investment: FV > CA of Investment: eg. FVPL
from the date that it ceases to Investment in Associate (CA) xxx Investment in Associate xxx FA - FVPL xxx
have significant influence Gain on Sale of Investment (SP-CA) xxx Gain from Remeasurement to FV xxx Investment in Associate xxx
Discontinuance
of Equity How Account After the
Discontinuance Initial Measurement
To remeasure the remaining balance of
Investment: FV < CA
Method a. FA at FVPL Loss from Remeasurement to FV xxx
b. FA at FVOCI Investment in Associate xxx
at FMV on the date
c. Nommarketable Investment of discontinuance
at Cost or Investment in
Unquoted Equity Instrument

An investment in associate shall not be accounted

for using the equity method if the investor is a The Investment may be accounted for as:
PARENT that is EXEMPT from preparing
consolidated FS or if ALL of the following APPLY:

A. Investor is a wholly-owned subsidiary, or a

partially owned subsidiary of another entity and the
owners do not object to the investor not applying FA - FVPL
equity method.

Equity Method B. The investor's debt and equity instruments are not
Not Applicable traded in a public market or "over the counter"
market. FA - FVOCI

C. The investor did not file or it is not in the process

of filing financial statements with the SEC for the
purpose of issuing any class of instruments in a
public market.
Non-Marketable Investment at COST
or Investment in UNQUOTED EQUITY
D. The ultimate or any intermediate parent of the INSTRUMENTS
investor produces consolidated FS available for
public use that comply with PFRS.

It shall be measured at :
Investment in Should be accounted for using IFRS 5 Non-
Associate Classified current Asset Held for Sale Lower of CA and FV - Cost of Disposal
as Held for Sale

Accounting for Investment of Less Than 20%

Presumption: No significant Influence, unless such a. Fair Value
influence can be clearly demonstrated
applicable to FA measured at FA-FVPL and FA-
Investment of Less FVOCI
than 20% b. Cost Method
Should not be accounted for under Equity Method applicable to investment in UNQUOTED equity
instrument or NON-MARKETABLE equity
investment

Journal Entries: AT Cost Method

Dividend from No distinction between pre-acquisition and post-
acquisition dividends
Acquisition
Investment in Shares xxx
preacquisition Cash xxx
retained Accounted for as Dividend Income under FV or Cost Share in Net Income of Investee Company
earnings Method
No Entry

Receipt of Bonus Issue

Memo Entry Only; Cost per share will decrease

Share in Net Loss of Investee

No Entry

Declaration and payment of cash dividend of

investee
Cash xxx
Dividend Income xxx

Sale of shares held

Cash (Selling Price) xxx
Investment in Shares (at Cost) xxx
Gain on sale of Investment xxx
Remember: Cost per share will change due
to the bonus issue received
 FROM COST METHOD TO EQUITY METHOD FROM FVOCI METHOD TO EQUITY METHOD
The investor shall remeasue the previously held Acquisition of Investment: Cost Method Acquisition of Investment: FVOCI
From Below 20% of equity interest at FV and recognize the resulting gain
Ownership To 20% or loss in profit and loss: FV APPROACH Investment in Shares xxx Financial Assets - FVOCI xxx
up to 50% Cash xxx Cash xxx

a. The existing interest in the associate is

remeasured at FV with any change in FV included in Receipt of Dividends Receipt of Dividends
Investment Below 20% -
Accounted for at
PROFIT OR LOSS Cash xxx Cash xxx
Dividend Income Dividend Income
Achieved in Cost or at FV b. If the existing interest is accounted for at FVOCI,
xxx xxx

any unrealized gain or loss at the date the investee

Stages becomes an associate is RECLASSIFIED TO R/E Acquisition of Additional Interest Remeasurement to FV at year-end; FV Increase
Investment in Associate xxx Financial Asset - FVOCI xxx
c. Existing FV + Cost of the Additional Interest
Acquired = Total Cost of Investment Cash xxx Unrealized Gain - OCI xxx

At 20% and up but

not exceeding 50% - Remeasurement of Existing Interest at FV Acquisition of Additional Interest
at Equity d. Total Cost of Investment - Carrying Amount of the
Net Assets Acquired = Excess of Cost over Carrying FV > Cost Investment in Associate xxx
Amount or Excess Net Fair Value Invesment in Shares xxx Cash xxx
Gain on remeasurement to equity xxx
Reclassification of Unrealized Gain to RE:
Reclassification of Existing Interest Unrealized Gain - OCI xxx
Investment in Associate xxx Retained Earnings xxx
Investment in Shares xxx
Reclassification of Existing Interest
Receipt of Dividends
Cash xxx Investment in Associate xxx
Investment in Associate xxx Financial Asset - FVOCI xxx

Amortization of Excess of Cost Share in the Income of Associate

Investment Income xxx Investment in Associate xxx
Investment in Associate xxx Investment Income xxx

FV of existing xxx Receipt of Dividends

Cost of new xxx Cash xxx
Total cost of investment xxx Investment in Associate xxx
CA of Net Assets Acquired xxx
Excess of Cost xxx Amortization of Excess of Cost
Investment Income xxx
If Attributable to PPE: Investment in Associate xxx
Excess of Cost xxx
Divided by Remaining EUL xxx FV of existing xxx
Amortization xxx Cost of new xxx
Total cost of investment xxx
CA of Net Assets Acquired xxx
If Excess of Cost is Atttributable to Goodwill, No
Amortization Excess of Cost xxx

If Attributable to PPE:
Excess of Cost xxx
Divided by Remaining EUL xxx
Amortization xxx

If Excess of Cost is Atttributable to Goodwill, No

Amortization