Financial Instruments
2020-03-25 08:43:50 7 举报AI智能生成
USCPA复习提纲-金融资产
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Overview
Financial Assets
Cash
Evidence of an ownership interest in an entity
Contract conveys right to receive cash or othe FI or exchange FI on favorable terms
Financial Liabilities
Contract imposes obligation to make payment or exchange on unfavorable terms
Fair Value Option
Definition: during election dates, the eligible FI can be recognized at FV instead of normal way
Eligible FI: debt AFS, equity that has significant influence
FV changes: instrument-specific credit risk to OCI, derivative liabilities to NI
Election Dates
Debt Securities
Examples
Bonds, redeemable preferred stock, Gov securities, convertible debt, commercial paper
Classification
Trading Securities
CF from op, FV, all G/L in IS
Available-for Sale Debt Securities
CF from inv, FV, realized G/L on IS, unrealized on OCI
Held-to-Maturity Debt Securities
CF from inv, amortized cost
Valuation
FV
FV changes is unrealized
Trading debt securties--net income
AFS debt securities--OCI
Realized G/L all to NI
When debt securities are sold
When AFS debt is deemed to be impaired
Amortized cost
HTM only, no unrealized G/L, only realize G/L on sale
Reclassification
Trading to any other
No unrealized G/L
Any other to Trading
Recognize unrealized G/L in current earnings
HTM to AFS
Unrealized G/L in OCI
AFS to HTM
already recognized unrealized G/L, but should amortize them
Income
interest income from trading or AFS is recorded by crediting Interest Income on NI
Impairment
(All realized loss)
(All realized loss)
ECL
PV FCF - Amortized cost
HTM
ECL on IS to write down BV to PV
AFS
BV write down to PV, difference to NI, then write down to FV, difference to OCI.
If FV is more than PV, write down to FV, difference to NI
If FV is more than PV, write down to FV, difference to NI
Sale of Debt Securities
Trading securities
Realized G/L=SP-carrying value
AFS
Realized G/L=SP-original cost. previously rec. unrealized G/L
should be removed from AOCI
should be removed from AOCI
Equity Securities
Example
common/preferred stock; stock warrants/rights and call options, put options
Classification
Fair Valur Through Net Income
Most equity securities, all G/L on IS
Exception
When there is determinable FV, BV=cost-imairment ±observable price changes
Valuation
No significant influence
Unrealized G/L on IS
Significant influence
Equity method
Control
Consolidate
Dividend income
Normal cash dividend
recognize Dividend Income on IS
Liquidating Dividend
When cash dividend exceed retain earning, the excess
dividend is recognized as credit "Investment in investee",
which is writing down the asset account
dividend is recognized as credit "Investment in investee",
which is writing down the asset account
Impairment
For practicability exception, when there is qualitative indicator of impairment, it should be recognized in IS
Sale of Security
If SP=CV, no G/L, if not, recognize G/L
Required Disclosures
For debt securities
AFS, HTM must disclose aggregate FV, gross unrealized holding G/L,
amortized cost basis, maturity info
amortized cost basis, maturity info
For equity securities
Portion of unrealized G/L for securities still held
( that for sold one should be deducted)
( that for sold one should be deducted)
Fair Value
Public entities must disclose measurement hierachy of FV
Concentrations of Credit Risk
Must
Market Risk
Optional
Under IFRS 9
Financial Assets
Single Model for classification and measurement
(Initially FV, then amortized ot FV)
(Initially FV, then amortized ot FV)
Business model for managing FA
Contractual CF model
Debt Instruments
Amortized cost
If to collect contractual CF and for SPPI (HTM)
FV
FVOCI (AFS), FVPL (TS)
Equity Instruments
FVPL
FVOCI ( only when it is irrevocably elected on initial recognition)
Reclassifications
remeasured at FV (like US), any G/L in to earning (unlike US)
Financial Liabilities
Initially FV, then
Amortized cost
Generally used
FV
Certain circumstances, FVPL
Reclassification between AC and FV is prohibited
Impairment
Not applied to FVPL
12-month ECL should be recognized at acquirment, lifetime ECL should
be recognized when the risk increases significantly
be recognized when the risk increases significantly
Recognized in "Loss allowance", not direct write off
AC-in earnings
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