tailieunhanh - Lecture International financial statement analysis: Chapter 15 - CFA Institute

This chapter describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for (1) investments in financial assets, (2) investments in associates, (3) joint ventures, (4) business combinations, and (5) special purpose and variable interest entities; distinguish between IFRS and . GAAP in the classification, measurement, and disclosure of investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities; | Chapter 15 INTERCORPORATE INVESTMENTS Presenter’s name Presenter’s title dd Month yyyy LEARNING OUTCOMES Describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for (1) investments in financial assets, (2) investments in associates, (3) joint ventures, (4) business combinations, and (5) special purpose and variable interest entities. Distinguish between IFRS and . GAAP in the classification, measurement, and disclosure of investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities. Analyze how different methods used to account for intercorporate investments affect financial statements and ratios. 1 intercorporate investments Intercorporate investments include investments in the debt and equity securities of other companies. Reasons for investing in other companies: To achieve additional profitability. To enter new markets through companies established in those areas. To diversify. To obtain competitive advantages. The classification of intercorporate investments is based on the degree of influence or control that the investor is able to exercise over the investee. Copyright © 2013 CFA Institute 2 LOS. Describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for (1) investments in financial assets, (2) investments in associates, (3) joint ventures, (4) business combinations, and (5) special purpose and variable interest entities. Examples of intercorporate investments include IBM’s acquisition of a sizable portion of Intel’s stock to ensure a supply of components. Coca-Cola’s acquisition of a bottling company to gain cost advantage. 2 Classifying intercorporate investments Investments are classified into four categories based on the degree of influence or control: Investments in financial assets (ownership percentage < 20%): Investments in which the investor has | Chapter 15 INTERCORPORATE INVESTMENTS Presenter’s name Presenter’s title dd Month yyyy LEARNING OUTCOMES Describe the classification, measurement, and disclosure under International Financial Reporting Standards (IFRS) for (1) investments in financial assets, (2) investments in associates, (3) joint ventures, (4) business combinations, and (5) special purpose and variable interest entities. Distinguish between IFRS and . GAAP in the classification, measurement, and disclosure of investments in financial assets, investments in associates, joint ventures, business combinations, and special purpose and variable interest entities. Analyze how different methods used to account for intercorporate investments affect financial statements and ratios. 1 intercorporate investments Intercorporate investments include investments in the debt and equity securities of other companies. Reasons for investing in other companies: To achieve additional profitability. To enter new markets through .