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SOLUTIONS MANUAL for Advanced Accounting, 15th Edition by Joe Ben Hoyle, Thomas Schaefer & Timothy Doupnik ISBN13: 9781264798483 (Complete 19 Chapters) £12.34   Add to cart

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SOLUTIONS MANUAL for Advanced Accounting, 15th Edition by Joe Ben Hoyle, Thomas Schaefer & Timothy Doupnik ISBN13: 9781264798483 (Complete 19 Chapters)

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SOLUTIONS MANUAL for Advanced Accounting, 15th Edition by Joe Ben Hoyle, Thomas Schaefer & Timothy Doupnik ISBN13: 9781264798483 _TABLE OF CONTENTS_ Chapter 1: The Equity Method of Accounting for Inve stments Chapter 2: Consolidation of Financial Information Chapter 3: Consolidations—Subsequent t...

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  • August 28, 2024
  • 204
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  • Exam (elaborations)
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  • Advanced Accounting, 15th Edition By Joe Ben Hoyle
  • Advanced Accounting, 15th Edition By Joe Ben Hoyle
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,ACCESS bTest bBank bfor bAdvanced bAccounting b15th bEdition bHoyle




Chapter b01 b- bThe bEquity bMethod bof bAccounting bfor bInvestments b– bHoyle, bSchaefer, bDoupnik,


bAdvanced bAccounting, b15e




CHAPTER b1


b THE bEQUITY bMETHOD bOF bACCOUNTING bFOR bINVESTMENTS



Chapter bOutline



I. Four bmethods bare bprincipally bused bto baccount bfor ban binvestment bin bequity


bsecurities balong bwith ba bfair bvalue boption.




A. Fair bvalue bmethod: bapplied bby ban binvestor bwhen bonly ba bsmall


bpercentage bof ba bcompany’s bvoting bstock bis bheld.




1. The binvestor brecognizes bincome bwhen bthe binvestee bdeclares ba bdividend.



2. Portfolios bare breported bat bfair bvalue. bIf bfair bvalues bare bunavailable,


binvestment bis breported bat bcost.




B. Cost bMethod: bapplied bto binvestments bwithout ba breadily bdeterminable bfair bvalue.

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, bWhen bthe bfair bvalue bof ban binvestment bin bequity bsecurities bis bnot breadily



bdeterminable, band bthe binvestment bprovides bneither bsignificant binfluence bnor



bcontrol, bthe binvestment bmay bbe bmeasured bat bcost. bThe binvestment bremains



bat bcost bunless




1. A bdemonstrable bimpairment boccurs bfor bthe binvestment, bor



2. An bobservable bprice bchange boccurs bfor bidentical bor bsimilar binvestments bof


bthe bsame bissuer.




The binvestor btypically brecognizes bits bshare bof binvestee bdividends bdeclared bas


bdividend bincome.




C. Consolidation: bwhen bone bfirm bcontrols banother b(e.g., bwhen ba bparent bhas ba


bmajority binterest bin bthe bvoting bstock bof ba bsubsidiary bor bcontrol bthrough



bvariable binterests, btheir bfinancial bstatements bare bconsolidated band breported



bfor bthe bcombined bentity.




D. Equity bmethod: bapplied bwhen bthe binvestor bhas bthe bability bto bexercise


bsignificant binfluence bover boperating band bfinancial bpolicies bof bthe



binvestee.




1. Ability bto bsignificantly binfluence binvestee bis bindicated bby bseveral bfactors


bincluding brepresentation bon bthe bboard bof bdirectors, bparticipation bin

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, bpolicy-making, betc.




2. GAAP bguidelines bpresume bthe bequity bmethod bis bapplicable bif b20 bto b50


bpercent bof bthe boutstanding bvoting bstock bof bthe binvestee bis bheld bby bthe



binvestor.




Current bfinancial breporting bstandards ballow bfirms bto belect bto buse bfair bvalue bfor bany


bnew binvestment bin bequity bshares bincluding bthose bwhere bthe bequity bmethod bwould



botherwise bapply. bHowever, bthe boption, bonce btaken, bis birrevocable. bThe binvestor



brecognizes bboth binvestee bdividends band bchanges bin bfair bvalue bover btime bas



bincome.




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