FAR 4

Question 1

Trading securities

Answer 1

Debt securities that are bought specifically for the purpose of selling them in the near term

Question 2

Held to Maturity debt securities

Answer 2

If the corp has intent to hold the equity to maturity. Reported as current or non-current assets.

Question 3

How does an entity record dividend income in an investee that they have significant influence over (equity method)

Answer 3

• dividend income will reduce investment in entity and will not be recorded on IS
• preferred stock div income will be reported on IS

Question 4

IFRS Partial Goodwill Method

Answer 4

Acquisition Price- FV sub’s net assets acquired

Question 5

U.S. GAAP Goodwill

Answer 5

FV of sub- FV of sub’s net assets