Advanced Accounting (Canada) · Equity Investments: Classification & Fair Value

Four companies hold an identical, rising equity investment but report it under cost, equity, FVTPL, and FVTOCI. Their current and return-on-equity ratios come out different — which method flatters the numbers most, and does the underlying reality actually differ?

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More in Equity Investments: Classification & Fair Value

Two equity investments are both measured at fair value. One is FVTPL, one is FVTOCI. For the FVTPL one, where do its unrealized fair-value changes AND its dividends land?

Under ASPE §3856, a company holds a nonstrategic equity investment in a private company with no active market quote. How is it measured, and where would fair-value changes go?

An investor has joint control over an investee (shares control under a contractual arrangement). Equity method or consolidation?

Under the cost method, how is an equity investment measured and when is income recognized?

An investor holds a small minority stake but sits on the board and shapes the investee's strategic decisions. Strategic or nonstrategic — and what measurement follows?

A company elected FVTOCI for an equity investment at purchase. Two years later it wants to switch to FVTPL. Can it, and when could the election have been made?

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