Академический Документы
Профессиональный Документы
Культура Документы
Investing
Activities
Copyright 2011 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and
South-Western are trademarks used herein under license.
Investing Activities
Includes acquisition of long-term
imply asset.
Asset is recorded at Fair Value.
Fair Value includes cash paid, fair value of
debt incurred, fair value of lease payments .
Chapter: 07
IFRS
Research costs are expensed.
Product development costs are capitalized.
Chapter: 07
as operating activity.
Reduces current period net income.
Chapter: 07
Costs of Self-Construction
Cost of self-constructed asset = Fair Value
10
Capitalized interest
Chapter: 07
11
accumulated expenditures
Interest computation
Interest
12
acquiring natural
resources
Reclamation
cost or
restoration costs
Chapter: 07
Exploration
Costs
Costs incurred to
discover the
existence &
location of natural
resource
Development
Costs
Tangible costs
(capitalized)
Intangible costs
(expensed)
13
are capitalized.
Used by smaller producers.
Chapter: 07
14
Chapter: 07
15
16
Step 2
Step 3
Chapter: 07
17
Chapter: 07
18
is tested for
Impairment under U.S.GAAP & IFRS (for
earnings
To report higher earnings, useful lives or salvage
19
Other countries
20
Amortization
Straight-line method or
accelerated method
Straight-line method
Intangible assets
Depletion
Natural resources
Chapter: 07
Straight-line method or
proportionate to
consumption
21
IFRS
22
Chapter: 07
IFRS
Record impairment if:
Carrying amount >
Recoverable amount
(Higher of fair value or
sale)
Implied goodwill = Fair
value of reporting unit
Fair value of identifiable
assets
23
Long-Lived Assets
Upward revaluation
U.S.GAAP does
Chapter: 07
Replacement
Gain/loss on disposal or
24
Accumulated Depreciation/Depreciation
Expense
o Proportion of Depreciable Assets
Consumed = Total Accumulated
Depreciation/Acquisition Cost
Chapter: 07
25
Calculations (cont.)
PP&E/Depreciation Expense
o It is important to note that these are
Chapter: 07
26
Investment in Securities
Chapter: 07
27
cost.
Interest & Dividend received/receivable
each year are recorded as revenue.
Chapter: 07
28
Firms classify
securities that do not
fall into one of the
other two categories
as Available-for-sale.
Held-tomaturity
Firm has a
positive intent
& ability to
hold to
maturity.
Chapter: 07
29
Trading security
Marked-to-market.
Unrealized gain or loss: As a part of Net
Income.
Chapter: 07
30
Available-for-sale
Marked to market.
Unrealized gain or loss: As a part of other
Chapter: 07
31
securities
Tested whether securities that experienced
32
33
statements.
Chapter: 07
34
35
Chapter: 07
36
37
Chapter: 07
38
Noncontrolling Interests
Arises if an investing firm acquires less
39
40
41
Consolidation of Unconsolidated
Subsidiaries and Affiliates
Companies do not consolidate the
42
Special-Purpose or Variable-Interest
Entity (VIE)
Can be a corporation, partnership, trust or
43
Consolidating VIE
Firm must consolidate if it is the primary
44
income.
Investments in 80% or more of the common
stock.
Consolidated
Chapter: 07
Chapter: 07
46
Translation Methodology-Foreign
Currency is the Functional Currency
Income
Revenues & expenses are translated
Statement at average exchange rate.
Income includes realized translation
gains & losses on sale of foreign unit
Balance
Sheet
Chapter: 07
Translation Methodology-Foreign
Currency is the Functional Currency
Translation adjustment is a component
of other comprehensive income &
includes:
Effect of exchange rate changes on the
Chapter: 07
48
49
Balance
Sheet
Chapter: 07
50
Subsidiary of US parent
Dividends received are translated at exchange
Chapter: 07
51
Analyst Adjustments
Whether to include change in the foreign
Chapter: 07
52
Chapter: 07
53