You Are the Accounting Manager for a Mid-Sized Electronics Retailer

Essay

You are the accounting manager for a mid-sized electronics retailer. Your accounting intern is having trouble understanding how your company accounts for its investments in the stock of other companies. You just spent the better part of the morning reviewing in detail all of the recording and reporting requirements but the intern is still fuzzy.
Complete the following table to compare and contrast for your intern the requirements for the different types of stock investments that your company might make. Be sure to use the legend provided.
Investments in Equity Securities Legend:
Accounting Method: Equity method, Equity method + Consolidation, or Fair value method
Impact of Dividend Receipts: Decrease investment, Eliminated, or Increase income
Reporting of unrealized gains/losses: Balance sheet, Income statement, or Not recognized