Question

identify the classes for debt and share investments?

Answer 1

Classes of Debt Investments are as follows:

A.) Debt Investment - Trading

B.) Debt Investment- Held to Maturity

C.) Debt Investment - Available for Sales

Trading & Available for sales Debt Investments are adjusted for year end fair value adjustment, whereas Debt Investment-Held to maturity at kept at Cost.

Classes of Shares Investments:

A.) Equity Investments- Insignificant influence , under 20%

B.) Equity Investments- Significant influence , 20% to 50%

C.) Equity Investments- Controlling influence , more than 50%

Insigniciant Influence Investments are adjusted for year end fair value. Significant influence investments are dealt as per the Equity Method. Where as Controlling Influence Investments are treated as per Consolidation Method.