INVESTMENT IN EQUITY SECURITIES PERS 4 - FINANCIAL INSTRUMENTS PURPOSE OF INVESTMENTS 1 To-carn profit (pausive income) 1 To serve operating and Financial arrangements % beneficial rdationship with another entity «bond inking fund <— mandatory voluntary 1 To serve as protection for future poccivle locses ie: Hedging instruments —- Derivatives INVESTMENT IN GQUITY \IAPHETABIUGTVET)AeEAUWT of FA We ARMAMENT AcOH Leinutead of investment account Use belt | treatment Debit balance + Credit balance = TRANSACTIONS SUBSEQUENT TO ACQUISITION SALE. INVESTMENT as ees nail PFS provides that the ently shal Acrecegnine # financial airet when ~"derecognition of financiat asset (investment) * Pinae tne x ne se Hee he f00, fina of francil anor bavt 5M Pri eae ht ven srnitetca ona spe rancter quai em Saeligton Wes "asa Nar oat br oan Nel telling price Selling price xx ——9 shan exelude the dividends Carrying amound (xe) SS Cot 4o sell cn) if sold Dividend -on Gain | Loos xe ree elling price Te Pie latest Fair value Winder PFRSA —* no gain or Ios On Sale ~ before digposal, the financial aused is remeasured 4o its fair value with gain or loss recognized ih 0¢1JoeL Ls FV = Sales price = any Gil shall be transferred fe RE. Under = with gain] los on sale Wes (elling price xx Original cot (xx) Gain] Loss on sale “AY Net selling price ~ oe & Carrying amound — (x¥) tmpairment cost (OD Gain te zs /-——_ xACCOUNTING FoR DIVIDENDS © Dale of declaration - date on which payment of dividends is approved by the boards of directors. = fevenme] inueme frm dividends shall be recegnired only when the sharcholder'c right te Keceive was already ettabliched = recognire dividend income date on which the stock and transfer book is elated for regitttation ~ only those tharewolders registered up te nit date are entitled to receive dividends = no journal entry Dotle of Settiement /paymneni - date on which the dividends declared @ Fu or Theoretical value C Investment in chares x MEASURING crock RIGHTE Fv of hares Ceecrignt) Jhemretical value assigned 49 sha right en ¢ shave 1c selling right ons ‘Theoretical _ FV of shares rignt-on — Subscription/ecercice price Value nO. Hf chock rights te purchase a share t 1 When the shave 1c selling e¢-right = Theoretical _ FV of shares rignt-on — Subscription/evercice price value 0. Of stock rignit fe parchare a share memorandum entry (upen receipt of chek rights) RECLASSIFICATIONS are NOt allowed (under PrRS 4) IMPAIRMENT AND REVERCAL OF [IMPAIRMENT — aire net applicable (under FV model)