Accounting - Investments

when do you not have to record mark-to-market adjusting journal entry

when you own over 20%

unrealized gain or loss

gains and losses resulting from changes in the value of investments used in the mark-to-market adjustment - recorded on the income statement

realized gain or loss

gains and losses resulting from the sale of investments - recorded on the income statement

the mark-to-market adjustment is an exception to which generally accepted accounting principle

historical cost concept

in what situation would a company not record cash received from dividends as an operating cash flow

if the company prepares its financial statements following IFRS, they can report cash received from dividends as either an operating cash flow or an investing cash flow.

investments in debt securities and investments in equity securities under 20% - at year end

make an adjusting entry to reflect any changes in the market value of the investment (called mark-to-market adjustment)

investments in equity securities where you own 20% or more of the other company's stock - record your share of the other company's net income as ________

record as an increase to the investment account and as investment revenue (other co. net income x % ownership)

investments in equity securities where you own 20% or more of the other company's stock - when investment is acquired

record it at cost (represents an asset)

investments in debt securities and investments in equity securities under 20% - when investment is acquired, record it _______

record it at its cost when acquired (represents an asset)

investments in debt securities and investments in equity securities under 20% - when the investments are sold

record the cash received from the sale and any gain or loss realized from the sale (calculate the realized gain/loss) compare the selling price of the investment to the amount at which the investments are being reported on the balance sheet

investments in equity securities where you own 20% or more of the other company's stock - when the investments are sold

record the cash received from the sale and any gain or loss realized from the sale (selling price-balance inv. acc.)

investments in equity securities where you own 20% or more of the other company's stock - if any dividends are received

record them as a decrease to the investment account (not treated as dividend revenue)

investments in debt securities and investments in equity securities under 20% - if any dividends are received, record them as _________

record them as dividend revenue