CONCEPT MAP – INVESTMENTS

ACCTG 14
CN 3004

Submitted by: DONNA MAE A. SINGSON

  CONCEPT MAP – INVESTMENTS

DEPOSIT

BONDS REAL
ESTATES

FUNDS INVESTMENTS OPTIONS

PRECIOUS
METALS CURRENCY

ART
 Definitions:
 DEPOSIT - is a fixed-term investment that includes the deposit of money into an
account at a financial institution. Term deposit investments usually carry short-
term maturities ranging from one month to a few years and will have varying
levels of required minimum deposits.
 BONDS - (also known as fixed income instruments) are used by governments or
companies to raise money by borrowing from investors. Bonds are typically
issued to raise funds for specific projects. In return, the bond issuer promises to
pay back the investment, with interest, over a certain period of time.
 FUNDS - is a supply of capital belonging to numerous investors used to
collectively purchase securities while each investor retains ownership and control
of his own shares.
 PRECIOUS METALS - are metals that are rare and have a high economic value,
due to various factors, including their scarcity, use in industrial processes, and
role throughout history as a store of value. The most popular precious metals
with investors are gold, platinum, and silver.
 ART - for patient investors with a time window of 10 years or more, so think long
term. Many art investors include paintings in their estate planning as assets to
pass on to their descendants.
 CURRENCY - involves buying the currency of one country while selling that of
another. This is done through the foreign exchange market, or “forex.” Forex
trading always happens in pairs. For a transaction to be complete, one currency
has to be exchanged for another.
 OPTIONS - financial instruments that are derivatives based on the value of
underlying securities such as stocks. Call options allow the holder to buy the
asset at a stated price within a specific timeframe. Put options allow the holder to
sell the asset at a stated price within a specific timeframe.
 REAL ESTATES - the purchase of property as an investment to generate
income rather than using it as a primary residence. Some of the examples of real
estate are a house, office building, agricultural land, commercial plot, etc. It is
considered to be a secured form of investment.
LECTURE #1
Investment in Equity Instruments – Financial Assets at Fair Value

INVESTMENT IN EQUITY INSTRUMENTS

 INITIAL SUBSEQUENT
MEASUREMENT MEASUREMENT

FVTPL
Entity shall
measure a
financial asset at FAIR VALUE THROUGH PROFIT/LOSS

FAIR VALUE
FVTOU
Financial Asset at
FVTPL

AMORTIZED
COST
Trading securities

Quoted equity instruments

Irrevocably designated on initial

recognition at FVTPL

All debt investments that do not satisfy the

requirements for measurement at
amortized cost and at FVTOCI

Proforma Journal
Entry
Include both equity securities and debt
securities.

Sale of FA@FVTPL
ACQUISITION Increase in FV
Decrease in FV Cash XX
FA@FVTPL XX FA@FVTPL XX
Unrealized Loss XX FA@FVTPL XX
Unrealized Gain XX
Cash XX FA@FVTPL XX Gain on sale XX
Increase in FV
FA@FVOCI XX
LEC#3 EQUITY INVESTMENTS (Dividends, share split and share right)

DIVIDENDS
When are the dividends
considered earned
 DIVIDENS
CASH
RECEIVED IN
CASH LIUE OF
DIVIDENDS SHARE

SHARE
PROPERTY RECEIVED IN
DIVIDENDS LIEU OF CASH
LEC#4: INVESTMENT IN ASSOCIATE

EQUITY
METHOD
 LEC#5 FINACIAL ASSET AT AMORTIZED COST

Classification
of bond
investments

Financial asset at
fair value
Financial asset
through profit or
held for trading
loss by
irrevocable
designation or by
fair value option
Financial asset at
Financial asset
fair value
at amortized
through other
cost
comprehensive

Amortization of premium or
discount

Amortizatio Amortization
n of bond of bonds
discount premium

Investment in bonds XX
Interest income XX
Investment in bonds XX
Interest income XX