- NY Credits : 4.0
- TX Credits : 4.0
This course discusses and compares the general methods of accounting for investments in equity securities: the fair value method or the cost method if fair value is not readily determinable, the equity method, and consolidation. Emphasis is on the equity method. The fair value/cost methods, and, to a lesser extent, consolidation are discussed to differentiate them from the equity method and to establish a basis for understanding the different methods. This course also discusses changing from the fair value method (or in limited situations where appropriate, the cost method) to the equity method and changing from the equity method to the fair value or cost method. In addition, it discusses income tax considerations for the equity method, step-by-step acquisitions, and consolidation. This course is most beneficial to professionals new to accounting for investments who may be at the staff or entry level in organization but also for a seasoned professional with limited exposure to accounting for investments.
Upon successful completion of this course, the user should be able to:
describe and distinguish between the three methods for accounting for investments in equity securities,
summarize the accounting for the fair value method and the equity method, including equity method goodwill and goodwill impairment in general,
define the financial statement impact of the fair value method, cost method and the equity method,
identify the step-by-step acquisition method,
summarize the preparation of consolidated financial statements including noncontrolling interest, and
compare and contrast the equity method and consolidation.