F4 Financial Instruments

Question 1

An investor uses fair value through net income to account for an investment in common stock. Dividends received this year exceeded the investor’s share of investee’s undistributed earnings since the date of investment. The amount of dividend revenue that should be reported in the investor’s income statement for this year would be:

Answer 1

The portion of the dividends received this year that were not in excess of the investor’s share of investee’s undistributed earnings since the date of investment