MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2019

MATERI LAB 3
STOCK INVESTMENT

❖ Accounting for Stock Investment

(Instrumen (Investasi (Laporan

Keuangan) pada Entitas Keuangan
Asosiasi dan Konsolidasi)
Ventura
Bersama)

❖ Significant Influence
Bila investor memiliki significant influence atas investee maka investor menggunakan
equity method untuk mencatat investasinya. Significant influence dibuktikan dengan:
1. Keterwakilan dalam dewan direksi
2. Partisipasi dalam proses pembuatan kebijakan
3. Adanya transaksi material antara entitas dengan investee
4. Pertukaran personel manajerial
5. Penyedia informasi teknik pokok

❖ Fair Value/Cost Method and Equity Method

Fair Value/Cost Method Equity Method

To record investment
Investment in Subsidiary xxx Investment in Subsidiary xxx
Cash xxx Cash xxx
To record dividend received
Cash xxx Cash xxx
Dividend Income xxx Investment in Subsidiary xxx
To recognize earnings
Investment in Subsidiary xxx
No entry
Income from Subsidiary xxx

ADIVA – FARHAN – NADYA FATA 2019

MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2019

❖ Example
On January 1, 2022, Rigel Corp purchased 30% of outstanding voting common stock of
Celestial Corp for $3,000,000 in cash. Rigel is a member of Celestial Financial Committee.
Below is the Statement of Financial Position of Celestial Corp on January 1, 2022 (in $000) :
Book Fair
Accounts
Value Value
Cash 2,590 2,590
Accounts Receivable-net 1,400 1,400
Inventories 3,200 4,000
Other Current Assets 940 920
Equipment-net (15 years) 2,500 2,500
Total Assets 10,630 11,410
Accounts Payable 2,300 2,300
Notes Payable (due in 5 years) 1,100 900
Common Stock 6,000
Retained Earnings 1,230
Total Liabilities and Equities 10,630

Additional Information:
1. Inventories were sold in 2022.
2. Other Current Assets were disposed in 2022.
3. Celestial’s shared dividends on September 2 was $800,000 and Celestial’s
net income for 2022 was $2,600,000.

Required:
1. Schedule for allocating excess of cost over book value
2. Income calculation from 30% investment in Celestial
3. Investment balance calculation
4. All necessary journal entries

ADIVA – FARHAN – NADYA FATA 2019

 MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2019

Solution:

1. Schedule for allocating excess of cost over book value (in 000)

Investment in Celestial Corp $ 3,000

BV of Interest Acquired ((6,000 + 1,230) × 30%) $ 2,169

Total Excess of Cost over BV $ 831

Allocation to identifiable net assets:

Excess %
Net Assets FV BV Amount
Allocated Acquired
Inventories Undervalued $ 4,000 - $ 3,200 × = $ 240
Other Current Assets Overvalued $ 920 $ 940 30% $ (6)
Notes Payable Overvalued $ 900 $ 1,100 $ 60
Total assigned to net identifiable asset $ 294
Remainder assigned to goodwill $ 537
Total excess of cost over book value acquired $ 831

2. Income from 30% investment in Celestial Corp (in $000)

Celestial’s Reported Income (2,600 × 30%) 780
Amortization of Excess Cost over BV:
Inventory (sold) -240
Other Current Assets (disposed) 6
Notes Payable (60 ÷ 5 years) -12
Total income from Celestial Corp 534

Note: land, goodwill, dan indefinite life intangible assets tidak diamortisasi sehingga tidak
mempengaruhi perhitungan adjustment income from investee

3. Investment Balance (in $000)

Initial Investment Cost 3,000
Add: Income from Celestial 534
Less: Dividends Received (800 × 30%) -240
Investment in Celestial December 31, 2022 3,294

ADIVA – FARHAN – NADYA FATA 2019

MATERI PRAKTIKUM AKUNTANSI KEUANGAN LANJUTAN FATA 2019

4. Journal Entries (in $000)

a. To record investment in Celestial Corp
Investment in Celestial 3,000
Cash 3,000

b. To record income from Celestial Corp

Investment in Celestial 780
Income from Celestial 780
c. To record write off excess allocated inventory
Income from Celestial 240
Investment in Celestial 240

d. To record amortization of notes payable

Income from Celestial 12
Investment in Celestial 12

e. To record credit overvalued other current assets disposed

Investment in Celestial 6
Income from Celestial 6

f. To record dividends
Cash 240
Investment in Celestial 240
(800 × 30%)

ADIVA – FARHAN – NADYA FATA 2019