F4 Investments, Business Combinations and Goodwill

Question 1

Equity Method is for ownership of what %. How does income get recorded for this investment?

Answer 1

20%-50%. Significant influence. Income is recorded as % share of income for the investor.

Question 2

Reclassification of AFS or HTM to another group is done so at what value?

Answer 2

Fair value.

Question 3

What is the JE to record a credit loss on a HTM security?

Answer 3

Credit loss = Present value - amortized cost.

DR Credit Loss
CR Allowance for Credit Loss