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Intercorporate Investments - Coggle Diagram
Intercorporate
Investments
Types
Low-influence
less than 20%
Recognised as
Marketable Securities (A)
Control
Significant influence
between 20% and 50%
Recognised as
Investments in Affiliates (A)
Marketable Securities
Accounting
Methods
Intent
:
profit from short-term
market fluctuations
Trading Securities
Purchase:
$100
Dr. Marketable Securities (+A)
Cr. Cash (-A)
Increase in value:
$3
Dr. Marketable Securities (+A)
Cr. Gain on Investment(+R, +SE)
Sale:
$101
Cr. Marketable Securities (-A)
Dr. Cash (+A)
Dr. Loss on Investment (+E, -SE)
Intent
:
earn stable returns over medium/long term
with excess cash
Available-for-Sale (AFS)
Securities
Purchase:
$100
Dr. Marketable Securities (+A)
Cr. Cash (-A)
Increase in value:
$3
Dr. Marketable Securities (+A)
Cr. AOCI (+SE)
Sale:
$101
Cr. Marketable Securities (-A)
Dr. Cash (+A)
Cr. Gain on Investment (+R, +SE)
Dr. AOCI (-SE)