The Debt And Equity Securities - 1064 Words

Prior to 2016, both debt and equity securities could be classified as available for sale and their gains and losses reported in other comprehensive income; however, with the passing of Accounting Standard Update No, 2016-01, all equity securities must now be classified as trading and their unrealized gains and losses reported in earnings. The forthcoming evidence indicates that the financial statements better reflect the true risks taken by the company when the unrealized gains and losses on equity securities to appear in earnings rather than other comprehensive income. FASB issued Statement of Financial Accounting Standards No. 115 in May of 1993, which supersedes FASB Statement No. 12, Accounting for Certain Marketable Securities. The statement requires securities, with readily determinable fair values, be placed into one of three classifications: trading, available for sale, and held to maturity. Each of the three classifications has their own distinct reporting standards. Under this statement, equity securities can be classified as trading or available for sale, but debt securities can be classified as available for sale or held to maturity. Unrecognized gains and losses for available for sale securities are presented in other comprehensive income until they are recognized, at which time they are reclassified to the income statement. For the past ten years, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) haveShow MoreRelatedThe Debt And Equity Securities952 Words   |  4 PagesPrior to 2016, both debt and equity securities could be classified as available for sale and their gains and losses reported in other comprehensive income; however, with the passing of Accounting Standard Update No, 2016-01, all equity securities must now be classified as trading and their unrealized gains and losses reported in earnings. After examining the history of available for sale reporting standard and running pro form a scenarios of Yahoo! Inc.’s financial statements, the forthcoming evidenceRead MoreThe Debt And Equity Securities882 Words   |  4 Pages Prior to 2016, both debt and equity securities could be classified as available for sale and their gains and losses reported in other comprehensive income. However, with the passing of Accounting Standard Update No, 2016-01, all equity securities must now be classified as trading and their unrealized gains and losses reported in earnings. After examining the history of available for sale reporting standard and running pro forma scenarios of Yahoo! Inc.’s financial statements, I have determinedRead MoreThe Fasb Codification Topic 320 : Investments Debt And Equity Securities1487 Words   |  6 Pages Overall. The FASB Codification Topic 320: Investments-Debt and Equity Securities is included under the financial statement asset section and offers guidance on investment instruments that represent either a creditor relationship (debt ) or an ownership interest (equity) and provides standards for reporting such investments according to generally accepted accounting principles (GAAP) (FASB ASC 320-10-05-2, 2016). Debt securities included under this topic include any investment that would be consideredRead MoreCoca Cola Company And Debt Securities1170 Words   |  5 Pagespaper we will explain how The Coca Cola Company reported debt securities, stock investments and explain why they would invest in stock and debt securities. We will also take a closer look as to relative risks and rewards of the equity versus debt securities. Lastly we will discuss the difference between equity and debt securities. The Coca Cola Company reported their debt securities for the fourth quarter and the full-year for 2014 on the Equity Investments line of the Condensed Consolidated BalanceRead MoreResearch Note On Distressed Debt1503 Words   |  7 PagesResearch Note on Distressed Debt Distressed securities are securities of companies or government that are experiencing distress (either in financial or operational terms), default, or even bankruptcy. In case of debt, this is called distressed debt. Investing in distressed debt can result in big returns, but the downside is that when a company goes completely bankrupt, the value of your securities can go to zero. Distressed debt sells at a very low percentage of par value, for example 30 centsRead MoreThe Return On Total Assets Ratio Essay925 Words   |  4 Pagesestablished that the return on total assets for the British Empire Securities Plc. was 11.48% in 2013 and 5.8% in 2014, indicating a reduction in the rate of return of $1 invested in assets. In 2013, $1 of assets contributed $0.11 towards the profit, while in 2014, it was $0.058. The return on equity was also analysed to find out the profitability contribution by each $1 contributed by the common stock owners. The ROE of British Empire Securities Plc. was 11.71% in 2013, and dropped to 6% in 2014 as shownRead MoreCodification Essay675 Words   |  3 PagesAssets (Cash and cash equivalents, Receivables, Investments-Debt and Equity securities, Investments-Equity Method and Joint Ventures, Investments-Others, Inventory, Other Assets and deferred costs, Intangibles, and PPE), Liabilities (Liabilities, Asset retirement and environmental obligations, exit or disposal obligations, deferred revenue, commitments, contingencies, guarantees, debt, and distinguishing liabilities from equities), Equity, Revenue and Expenses (Cost of sales and services, compensationRead MoreHow Are The Corporation s Debt Securities Reported On The Financial Statements?994 Words   |  4 PagesHow are the corporation s debt securities reported on the financial statements? The balance sheet and income statements are summarized to analyze the year end from the year to demonstrate gain patterns and how the cash is reinvested and managed to its investors. In 2010, McDonald’s arranged a shelf registration form that can permit them to register a supplementary $500 million in dollars of debt securities with the Securities and Exchange Commissions. The corporation can then utilize these earningsRead MoreAcc557 Week 9 Quiz731 Words   |  3 Pagesexcess cash until needed. | A typical investment to house excess cash until needed is | stocks of companies in a related industry. | | low-risk, highly liquid securities. | | stock securities. | | debt securities. | Question 3 | | Pension funds and mutual funds regularly invest in debt and stock securities to | meet strategic goals. | | control the company in which they invest. | | generate earnings. | | house excess cash until needed. | Question 4 | Read MoreBusiness Financing And The Capital Structure879 Words   |  4 PagesBusiness Financing and the capital Structure Every business organization strives at expanding. However, expansion requires financial resources. There are two forms of financial resources namely debt and equity. What type of advice would a financial advisor by able to provide to their client. Discuss the advantages and disadvantage of each type of capital raising technique. What information could you provide your client on choosing an investment banker? What are the historical relationships between