Intermediate Accounting, 11th ed.
Kieso, Weygandt, and Warfield
Chapter 17: Investments
Investment Categories Under
SFAS 115
SFAS No. 115
Debt Securities
Trading
Available Held to
for Sale Maturity
Equity Securities
Trading
Available
for Sale
APB No. 118: Scope
Equity Securities
Equity Method
Consolidations
If 20% to 50%
voting stock
If more than 50%
voting stock
Debt Securities: Types and
Reported Amounts
Debt Instruments Represent a
Creditor Relationship
Trading
Securities
Record at
fair value
M.V.changes
recorded as part
of income
Available
for Sale
Held-toMaturity
Record at
fair value
Record at
Amortized cost
M.V.changes
recorded as part
of equity
M.V. changes
not recognized
Held-to-Maturity Debt
Securities
The investor has both:
 Memiliki niat positif
 Kemampuan untuk memiliki sekuritas itu
sampai jatuh tempo. Sekuritas yg dimiliki
sampai jatuh tempo dipertanggungjawabkan
sebesar biaya yg diamortisasi, bukan pada
nilai wajar.
Debt Securities: Available-for-Sale
• These investments are reported at fair
value in the balance sheet.
• Differences between the fair value and
amortized cost are reported as
KEUNTUNGAN ATAU KERUGIAN
KEPEMILIKAN YG BELUM DIREALISASI
(part of equity).
• When realized, gains and losses in fair
value are reported as part of net
income.
Debt Securities: Trading
 Trading securities DIMILIKI DG MAKSUD
AKAN DIJUAL KEMBALI DLM PERIODE
WAKTU YANG SINGKAT.
 Periode kepemilikan atas sekuritas ini biasanya
kurang dari 3 bulan.
 The securities are reported at fair value.
 Unrealized gains and losses are reported as
part of net income.
 Discount or premium is not amortized.
Equity Securities
 Equity securities Sekuritas yg menunjukkan
bagian kepemilikan seperti common,
preferred, or other capital stock.
 Sekuritas ekuitas mencakup hak untuk
memperoleh atau melepaskan bagian
kepemilikan dg harga yg sudah disepakati
atau yg dpt ditentukan seperti Warrant, hak,
opsi beli atau opsi jual.
 Sekuritas hutang konvertibel dan saham pref
yg dpt ditebus tdk diperlakukan sebagai
sekuritas ekuitas.
Tingkatan Pengaruh Menentukan Metode Akuntansi
Ownership Percentage
0%
20%
50%
Little
Significant
or none
100%
Control
Investasi oleh su/ Persh. Dlm shm biasa
persh. Lain dpt diklasifikasikan menurut
persentase shm dg hak suara investee yg
dimiliki investor
1. Kepemilikan kurang dari 20% (metode nilai
wajar) investor mempunyai hak pasif.
2. Kepemilikan antara 20% - 50% (metode
Ekuitas) investor memiliki pengaruh yg
signifikan.
3. Kepemilikan lebih dari 50%(Laporan
konsolidasi) investor mempunyai hak
mengendalikan.
Equity Securities: Available for Sale Securities
• Sekuritas yg tersedia utk dijual pd saat diperoleh
dicatat pd biaya atau hrg pokoknya.
• Laba bersih yg dihasilkan oleh invetee tdk
dianggap sebagai dasar yg tepat utk mengakui
laba dari investasi oleh investor (Jika investor
memiliki kurang dari 20% saham biasa persh.
Lain)
• Cash dividends are reported as income
• Unrealized holding gains and losses are reported
as:
• part of comprehensive income, and
• a component of stockholders’ equity
Equity Securities: Trading
Untuk sekuritas ekuitas perdagangan,
keuntungan dan kerugian kepemilikan belum
direalisasi dilaporkan sebagai bagian dari laba
bersih. Securities when acquired are recorded
at cost
 Cash dividends are reported as income
Equity Method
 Investor has significant influence over the
investee
 Investment is initially recorded at cost
 Jumlah yang tercatat investasi secara
periodik ditambah(dikurangi) dg bagian
proporsional investor atas laba/rugi
investee dan dikurangi dg semua deviden
yg diterima investor dari investee.
Investments in Equity Securities:
Consolidation
 The investor is the parent corporation; the
A voting interest of more than 50% results
in a controlling interest.
 investee is the subsidiary corporation.
 The investor prepares consolidated
financial statements for the parent and
the subsidiary.
Investments in Equity Securities:
Summary
Ownership in Capital Stock
less than
20% of voting
20 - 50% of
voting
more than
50% voting
Trading
Available
for Sale
No
Consolidation
Consolidation
Fair
value
Fair
value
Equity
method
Equity
method
Equity Securities: Accounting By
Category
Category
Valuation
Unrealized Holding Other Income
Gains and Losses
Effects
<20%
Fair value
Avail for sale
Other income and Dividends;
Equity
G & L (sale)
<20%
Trading
Fair value
Net income
Dividends;
G & L (sale)
20% 50%
Equity
Not recognized
Proportionate
investee’s inc
>50%
Consolidate Not recognized
Not applicable
Presentation
Must report amounts for each category of
investments:
1. Trading: reported at aggregate fair value as
current assets.
2. Available-for-sale: reported at aggregate fair
value and either current or noncurrent
assets.
3. Held-to-maturity: reported at amortized cost
and either current or noncurrent assets.
Impairments
Impairment exists when a decline in value
that is not temporary. If so, the carrying
value must be written down.
Debt securities: if the investor will not
collect monies owed.
Equity securities: must consider financial
condition of investee to determine if
decline is not temporary.
Debt Securities: Transfers Between
Categories
Issues:
 At what value is the security
transferred?
 How are gains and losses accounted
for?
 What is the effect of the gain/loss
accounting on income and equity?
Transfers Between Categories
Type of
Transfer
Measurement
Basis
Trading
to
Available
for Sale
Transferred at
fair value to
Available for
Sale category
and is the new
COST basis
of security
Impact of
Transfer on
Stockholders’ Equity
Unrealized gains or
losses at date of
transfer increase
or decrease
stockholders’
equity.
Impact of
Transfer on
Net Income
Unrealized gains or
losses at date of
transfer are
recognized in
income.
Transfers Between Categories
Type of
Transfer
Measurement
Basis
Impact of
Transfer on
Stockholders’ Equity
From
Available
for
Sale
to
Trading
Transferred at
fair value at the
date of transfer
and becomes
the new COST
basis of security
The unrealized
gains or losses at
the date of the
transfer increase
or decrease
stockholders’
equity
Impact of
Transfer on
Net Income
The unrealized
gains or losses at
date of transfer
is recognized
in income
Transfers Between Categories
Type of
Transfer
From
Held
to
Maturity
to
Available
for
Sale
Measurement
Basis
Impact of
Transfer on
Stockholders’ Equity
Transferred at
Unrealized gains or
fair value at
losses at date of
date of transfer transfer increase or
decrease a separate
component of equity
Impact of
Transfer on
Net Income
None
Transfers Between Categories
Type of
Transfer
From
Available
for
Sale
to
Held
to
Maturity
Measurement
Basis
Impact of
Transfer on
Stockholders’ Equity
Transferred at The unrealized gain
fair value at
or loss (at date of
date of transfer transfer) is carried
as a separate
component of equity
and is amortized
over the remaining
life of the security
Impact of
Transfer on
Net Income
None
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