University:
Alabama State University
Course:
ACC101 | Accounting
Academic year:

2024
Views:

203

Pages:

1
Author:

Charlie M.

Image Analysis: Investment in FVOCI Visual Elements: Central Diagram: A flowchart-like diagram outlining the characteristics, subsequent measurement, and interest calculations for investments in FVOCI (Fair Value through Other Comprehensive Income). Subsequent Measurement: A table summarizing the differences between fair value and amortized cost methods. Interest Calculation: Formulas for calculating interest income and interest receivable. Actual Sale of Investment: A table detailing realized gain or loss based on carrying amount and net proceeds. Textual Content: Investment in FVOCI: Characteristics: Non-current asset Contractual cash flow to collect: principal and interest Business model: selling the financial asset Subsequent Measurement: Fair Value: Unrealized gain/loss (cumulative) Amortized Cost: Unrealized gain/loss (current year) Unrealized gain/loss (cumulative balance last year) Interest Calculation: Interest Income: Face amount x Effective interest rate Interest Receivable: Face amount x Nominal interest rate Note: If effective interest rate is greater than nominal interest rate, there is a discount; if lesser, there is a premium. Actual Sale of Investment: Realized Loss: If carrying amount is greater than net proceeds Realized Gain: If net proceeds are greater than carrying amount