U.S. GAAP, Codification of Accounting Standards, ASC - Accounting Standards Codification by FASB

U.S. GAAP Codification of Accounting Standards

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Accounting Standards, ASC

U.S. GAAP Codification of Accounting Standards
Codification Topic 320: Investments-Debt and Equity Securities

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Codification Topic 320
Investments-Debt and Equity Securities

Investments in Debt and Equity Securities

Debt securities: represent creditor relationship
Equity securities: represent ownership interest

Investments in Equity Securities

   1. more than 50% of voting power
       --> prepare consolidated financial statements

   2. 20% or more, but no more than 50%
       --> equity method accounting

   3. less than 20%
       --> classified as either (a) or (b)
       (a) trading securities
       (b) available for sale securities

Investments in Debt Securities

   1. Held-to-maturity securities
       --> intent and ability to hold until maturity

   2. No intent or ability to hold until maturity
       --> classified as either (a) or (b)
       (a) trading securities
       (b) available for sale securities

Trading Securities

   Characteristics
       (a) "active and frequent" buying and selling
       (b) profits on "short-term price differences"

Available for Sale (AFS) Securities

   Securities not classified as either (a) or (b)
       (a) Trading Securities
       (b) Held-to Maturity (HTM) Securities

Measurement of Investments in Securities

   1. Trading Securities: Fair Value
   2. AFS Securities: Fair Value
   3. HTM Securities: Amortized Cost

Changes in Fair Value: Unrealized holding gains or losses

   1. Trading Securities: recognized in earnings
   2. AFS Securities: recognized in Other Comprehensive Income (OCI), not in earnings
   3. HTM Securities: not recognized

Impairment of AFS and HTM Securities

   If the decline in fair value is "other than temporary"
   --> recognize impairment losses in earnings

International Financial Reporting Standards (IFRS)

IAS 39: Financial Instruments: Recognition and Measurement

Codification Topic 320
Investments-Debt and Equity Securities

Subtopics of Codification Topic 320

320-10 Overall

Accounting Terms of Codification Topic 320-10

   Amortized cost basis
   Asset group
   Available-for-sale securities
   Component of an equity
   Cost basis
   Debt security
   Equity security
   Fair value
   Holding gain or loss
   Operating segment
   Readily determinable fair value
   Reporting unit
   Retrospective interest method
   Security
   Structured note
   Trading
   Trading securities