ACCT5020 Investments Cash Flow

Changes in FMV Trading Securities

Go into Net Income; non-cash

Indirect method changes in FMV of Trading Securities AND Equity Investments

need to remove from NI because non-cash and take change in Investment Accounting

Direct Method changes in FMV of Trading Securities AND Equity Investments

N/A, no cash impact

Purchases/Sales of Trading Securities

cash flow goes into CFO because companies hold for selling in the near term

Indirect Method purchases/sales of Trading Securities

take change in investment account; gain/loss is already in NI

Direct Method purchases/sales from trading securities

cash from Investments

Trading Securities

Treat like Current Asset

Available for Sale Securities

Treat like Long-term Asset

changes in FMV to AFS securities

no effect on Net Income; recorded in OCI so no worries

Purchases/sales of AFS securities

cash flow goes in Cash Flow from Investments

Indirect method purchases/sales from AFS securities and equity investments

remove gain/loss from sale in Net Income

Direct method Purchases/Sales of AFS Securities and Equity Investments

N/A

Purchases/Sales from Equity Investments

cash flow goes in Cash flow from Investments remove gain or loss from sale for indirect method

Equity Investments

treat like hybrid

Dividends from Equity Investments

do not go in Net Income, but are cash; Dividends received go to Cash flow from investments (CFO)

Indirect Method Dividends from Equity Investments

take the change in investments account

Direct Method Dividends from Equity Investments

record as part of cash received from investments

Changes in FMV for Equity Investments

Investment income goes to Net Income; non-cash