CONCEPT MAP – INVESTMENTS

ACCTG 14
CN 3004

Submitted by: DONNA MAE A. SINGSON

 CONCEPT MAP (INVESTMENTS)

INVESTMENTS
 EQUITY INVESTMENTS INVESTMENT IN ASSOCIATES DEBT INVESTMENTS INVESTMENT PROPERTY
PFRS 9 IAS 28, PFRS 12 PFRS 9 PAS 40

An equity instrument refers to a document Debt investment refers to an investor lending

which serves as a legally applicable evidence of Investment in Associate refers to the money to a firm or project sponsor with the Investment property is property (land or a
the ownership right in a firm, like a share investment in an entity in which the expectation that the borrower will pay back the building or part of a building or both) held (by the
certificate. Equity instruments are, generally, investor has significant influence but investment with interest. owner or by the lessee under a finance lease) to
does not have full control like a parent earn rentals or for capital appreciation or both.
issued to company shareholders and are used to An
and a subsidiary relationship.
fund the business. investment
is an asset Initial Recognition
or item that Debt securities at amortized cost – at purchase
Initial Recognition
Initial Recognition price plus transaction costs
is purchased Initially measured at cost including transaction costs
Debt securities at FVPL – at purchase price, which is
1. Equity securities at FVPL – At Fair with the the fair value at date of acquisition
Value Initial Recognition
hope that it Debt securities at FVOCI – at purchase price plus
2. Equity securities at FVOCI – At transaction costs
Fair Value plus Transaction Costs
Purchase price plus transaction costs will generate
income or
appreciate in Subsequent Measurement
Subsequent Measurement value at Subsequent Measurement Fair Value model – changes in FV at P/L
Subsequent Measurement or
some point Cost model – at cost less accumulated depreciation
FVPL – fair value changes recognized in P/L  at amortized cost – resulting premium or discount is
• Carrying amount is increased/decreased in the future. amortized over the term using effective interest method and any accumulated impairment losses
FVOCI – fair value changes recognized in other to recognize the investor’s share of the P/L of the An  at FVPL – change in FV recognized at P/L
comprehensive income investee after the date of acquisition
investment  at FVOCI – change in FV is taken as an unrealized
gain or loss in OCI
• Amortize the excess of investment cost always
concerns the
Impairment Assessment outlay of Impairment Assessment

Under PFRS 9, equity investments measured at fair value some asset Impairment Assessment Transfers to IP from owner occupied property –
are no longer tested for impairment. The measurement to today (time, any resulting decrease in carrying amount is
fair value is sufficient to include such impairment, if any. Impairment Assessment - No credit risk since initial recognition – recognized as impairment loss
money, recognize 12-month expected credit losses
Goodwill is not subject to amortization but is effort, etc.) - There has been a significant increase in
tested for impairment, at least annually credit risk since initial recognition –
in hopes of a
recognized lifetime expected credit losses
Derecognition greater
Derecognition
payoff in the
1. Expired
2. Transferred future than a. On disposal
Derecognition Derecognition b. When permanently withdrawn from use and no
Equity securities at FVOCI – any cumulative what was
future economic benefits
unrealized gains or losses on investment is transferred originally put On disposal/sale
a. Disposal/Sale
directly to retained earnings
b. Reclassification to Investment at fair value in.

Disclosure Requirements Disclosure Requirements

Disclosure Requirements 1.1 CA of each class of debt securities are
Significance of equity investments 1.1 The name of the joint arrangement or disclosed separately
Nature and extend of risks arising from equity associate 1.2 Material items of income, expense and gains
investments 1.2 The nature of the entity’s relationship and losses
Other disclosures: 1.3 The principal place of business and country 1.3 Accounting policies and methods adopted
- Amount recognized in OCI during the of incorporation 1.4 Transparent information about risks
period 1.4 The proportion of ownership 1.5 Whether fair values are determined directly,
- Amount removed from equity and
by reference or estimated
included in P/L for the period
1.6 Nature and amount of any impairment loss
Credit risk, Liquidity risk and Market risk