中级财务会计英文版第七章课后题答案

Chapter12-Investments12-1Chapter12InvestmentsQUESTIONSFORREVIEWOFKEYTOPICSQuestion12-1Investmentsecuritiesareclassifiedas“held-to-maturity,”“trading,”or“available-for-sale”securities.Question12-2Increasesanddecreasesinthemarketvaluebetweenthetimeadebtsecurityisacquiredandthedayitmaturestoaprearrangedmaturityvalueareignoredforasecurityclassifiedas“held-to-maturity.”Thesechangesaren’timportantifsalebeforematurityisn’tanalternative,whichisthecaseifaninvestorhasthe“positiveintentandability”toholdthesecuritytomaturity.Question12-3GAAPdistinguishesbetweenthreelevelsofinputstofairvaluedetermination,withlevel1beingreadilyobservablefairvalues(forexample,fromasecuritiesexchange),level2inputsareotherobservableamounts(forexample,quotedvaluesforsimilaritems,orimportantinputslikeinterestrates),andlevel3inputsareunobservable,likethecompany’sownassumptions.GAAPrequiresdisclosureoftheamountoffairvaluesbasedoneachofthesethreeclassesofinputs.Question12-4Forinvestmentstobeheldforanunspecifiedperiodoftime,fairvalueinformationismorerelevantthanforinvestmentstobeheldtomaturity.Changesinfairvaluesarelessrelevantiftheinvestmentistobeheldtomaturitybecausesaleatthatfairvalueisnotanoption.Theinvestorreceivesthesamecontractedinterestpaymentsfortheperiodheldtomaturityandthestatedprincipalatmaturity,regardlessofmovementsinmarketvalues.However,whentheinvestmentisofunspecifiedlength,changesinfairvaluesindicatemanagement’ssuccessindecidingwhentoacquiretheinvestmentandwhentosellit,aswellastheproprietyofinvestinginfixed-rateorvariable-ratesecuritiesandlong-termorshort-termsecurities.Question12-5Thewayunrealizedholdinggainsandlossesarereportedinthefinancialstatementsdependsonwhethertheinvestmentsareclassifiedas“securitiesavailable-for-sale”oras“tradingsecurities.”Securitiesavailable-for-salearereportedatfairvalue,andresultingholdinggainsandlossesarenotincludedinthedeterminationofincomefortheperiod.Rather,theyarereportedasaseparatecomponentofshareholders’equity,aspartofothercomprehensiveincome(OCI).(Available-for-salesecuritiesforwhichtheinvestorhaschosenthefairvalueoptionarereclassifiedastradingsecurities.)Chapter12-Investments12-2AnswerstoQuestions(continued)Question12-6Comprehensiveincomeisamoreexpansiveviewofthechangeinshareholders’equitythantraditionalnetincome.Itencompassesallchangesinequityfromnon-ownertransactions.Thenon-incomepartofcomprehensiveincomeiscalled“Othercomprehensiveincome.”Othercomprehensiveincomeincludesnetunrealizedholdinggains(losses)onAFSinvestments,andalsothenon-credit-losscomponentofother-than-temporaryimpairmentsofHTMinvestments.Question12-7Unrealizedholdinggainsorlossesontradingsecuritiesarereportedintheincomestatementasiftheyactuallyhadbeenrealized.Tradingsecuritiesareactivelymanagedinatradingaccountwiththeexpressintentofprofitingfromshort-termmarketpricechanges.So,anygainsandlossesthatresultfromholdingsecuritiesduringmarketpricechangesaresuitablemeasuresofsuccessorlackofsuccessinachievingthatgoal.Ontheotherhand,unrealizedholdinggainsorlossesonsecuritiesavailable-for-salearenotreportedintheincomestatement.Bydefinition,thesesecuritiesarenotacquiredforthepurposeofprofitingfromshort-termmarketpricechanges,sogainsandlossesfromholdingthesesecuritieswhilepriceschangearelessrelevantperformancemeasurestobeincludedinearnings.Question12-8Whenacquired,debtandequitysecuritiesareassignedtooneofthethreereportingclassifications–held-to-maturity,trading,oravailable-for-sale.Theappropriatenessoftheclassificationisreassessedateachreportingdate.Areclassificationshouldbeaccountedforasthoughthesecurityhadbeensoldandimmediatelyreacquiredatitsfairvalue.Anyunrealizedholdinggainorlossshouldbeaccountedforinamannerconsistentwiththeclassificationintowhichthesecurityisbeingtransferred.Specifically,whenasecurityistransferred:1.Intothetradingcategory,anyunrealizedholdinggainorlossshouldberecognizedinearningsofthereclassificationperiod.2.Intotheavailable-for-salecategory,anyunrealizedholdinggainorlossshouldberecordedinOtherComprehensiveIncome,whichwillthenincreaseAccumulatedOtherComprehensiveIncomeinshareholders’equity.3.Intotheheld-to-maturitycategory,anyunrealizedholdinggainorlossshouldbeamortizedovertheremainingtimetomaturity.ThiswouldbethecaseforWesternDie-Casting’sinvestmentintheLGBHeatingEquipmentbonds.Chapter12-Investments12-3AnswerstoQuestions(continued)Question12-9Yes.Althoughacompanyisnotrequiredtoreportindividualamountsforthethreecategoriesofinvestments–held-to-maturity,available-for-sale,ortrading–onthefaceofthebalancesheet,thatinformationshouldbepresentedinthedisclosurenotes.Thefollowingalsoshouldbedisclosedforeachyearpresented:aggregatefairvalue,grossrealizedandunrealizedholdinggains,grossrealizedandunrealizedholdinglosses,thechangeinnetunrealizedholdinggainsandlosses,andamortizedcostbasisbymajorsecuritytype.Informationaboutthelevelofthefairvaluehierarchyuponwhichfairvaluesarebasedshouldbeprovided,andmoredisclosureisnecessarywithrespecttoamountsbasedonlevel3ofthefairvaluehierarchy.Inaddition,informationaboutmaturitiesshouldbereporte