Question

In the following paragraph Is FCA accounting for its equity investments in a way that is consistent with U.S. GAAP? explain...

FCA Interests in other companies are measured at fair value. Investments in equity investments that do not have a
quoted market price in an active market and whose fair value cannot be reliably measured are recognized at cost.
For investments classified as available-for-sale, financial assets gains or losses arising from changes in fair value are
recognized in Other comprehensive income/(loss) until the assets are sold or are impaired; at that time, the cumulative
Other comprehensive income/(loss) is recognized in the Consolidated Income Statement. Interests in other companies
for which fair value is not available are stated at cost less any impairment losses.
Dividends received are included in Other income/(expenses) from investments.

Answer 1

The FCA is is recording the Investments as per US GAAP expect in the case where the investments for which fair value cannot be measured are recorded at cost. in such a case where the Fair Value cannot be ascertained the FCA shall take the fair value of shares of similar company and not at cost.

And in case of dividends, if the company's main objective is investing then such investments earnings such as dividends shall be accounted under revenue from operations and not other revenue