Please enable JavaScript.
Coggle requires JavaScript to display documents.
UNIT 4 Financial Investment (measurement (Cost. (Measurement of financial…
UNIT 4 Financial Investment
measurement
Cost.
Measurement of financial assets at amortised
cost
finalcial assets excluding equity instrument and whose receivables are of a fixed or calculable amount
Non-trade receivables (loans, credits for sale of fixed assets).
Debt securities, whether traded or not (bonds, debentures).
Deposits.
Loans to personnel.
Guarantees and deposits extended.
Dividends receivable
Calls for payment on equity instruments
Measurement of financial assets at cost
investment in the equity of group, multi-group or associated companies and other equity instruments: Shares may be acquired by subscription, directly from the company. Transaction cost. The cost of pre-emptive subscription rights.The amount of dividends arising from profit gained
Fair value.
Amortised cost.
Present value.
Nominal value.
Book value or accounting value.
Transaction costs to take into consideration.
Concept
The main reasons why a company uses resources for financial purposes are:
— Influence over, or control of, other companies.
— Obtaining gains by speculation.
— Receipt of income.
— Allotment of excess cash.
Types
financial assets
Shares in the capital of trading companies: shares in the case of corporations
(“sociedades anónimas”) and equity holdings in the case of limited liability
companies (“sociedades limitadas”).
Financial assets in the Spanish General Accounting
Plan
— Cash and cash equivalents.
— Trade receivables.
— Loans and credit extended to third parties, including credits for sale of noncurrent assets.
— Debt securities (debentures, bonds).
— Equity instruments acquired in other companies (shares and equity holdings).
— Derivatives: futures, options, swaps.
— Deposits in banks, loans to personnel, guarantees and deposits extended,
dividends receivable and receivables on called-up own equity instruments.
Financial investments in related companies
Spanish accounting legislation seeks to separate the information on transactions carried out between companies that belong to the same group of companies (under the same management unit)