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Essay / Research Paper Abstract
5 pages. This research paper is an informational tool on the topic of accounting for equity investment securities held as assets with emphasis on recognition, decognition and holding of the securities. These will be described in detail regarding the accounting for equity investment securities before the existence of SFAS 115.
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5 pages (~225 words per page)
File: D0_JGAsfas1.rtf
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JGAsfas1.rtf Accounting for Equity Investment Securities Research Compiled for Enterprises Inc. 11/2001 to Use This Paper
Properly, INTRODUCTION This research paper is an informational tool on the topic of accounting for equity investment securities held as assets with emphasis on recognition, decognition
and holding of the securities. These will be described in detail regarding the accounting for equity investment securities before the existence of SFAS 115. EQUITY INVESTMENT SECURITIES The
term equity security is described by the U. S. Securities and Exchange Commission as "to include any stock or similar security, certificate of interest or participation in any profit sharing
agreement, preorganization certificate or subscription, transferable share, voting trust certificate or certificate of deposit for an equity security, limited partnership interest, interest in a joint venture, or certificate of interest
in a business trust" (SEC, PG, 2001). Equity Investment Securities are commonly classified into one of three categories: Securities held to maturity, Securities classified as available for sale, or trading
securities. Securities held to maturity is one in which the secuity is allowed to be held until its maturity date. Securities, unlike stocks, have a specified maturity date.
These securities are therefore recorded at cost. The cost is then not adjusted for changes in the fair value of the securities. Holding "gains or losses from market
price changes are ignored" (SFAS, PG, 2001). Securities that are classified as available for sale are those securities that are adjusted to fair value when market prices change. This
is because these are securities that will not be held to their maturity date and "dont meet the strict definition of trading securities" (SFAS, PG, 2001). Holding gains and
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