Question

SL VIVI BEFORE attending the lectures Please complete the following questions: , 1. What are the different types of intercorporate investment relationships companies can have with one another? 2. For each intercorporate relationship (e.g. simple/passive investment), find 3 real- world examples involving well-known companies. Tips: - You will be sharing your examples with everyone during the first lecture in Week 1 - so make sure you have yours handy. Think of companies that you're interested in and Google them (e.g. "which companies are owned by McDonald's?'') 3. Identify 2 reasons why companies to choose to enter into each of these intercorporate relationships (e.g. strategic and economic motivations). Please note that some of these questions have no "right answer"- they are designed for you to explore the concepts in a real-world setting and gain an understanding of the business environments which you will face as accounting professionals. Please bring these items to your first lecture!

Answer 1

in held for wading securities are weported on the fien's income statement while a similar change in held -you- sale securities would be reported in shareholders' equity. U.S. GAAP does not allow jiems to weclassihu in ucclassify investiment relationships which have been originally classified as a hold for trading or designated as fave value investments.. So, tive accounting choices made by investing companies auhen making investments in financial assets can have a major effect on its financial statements