Asked by Raman Hundal on Jun 11, 2024
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Minority passive investments of less than 20% of the voting stock shares are classified as either trading securities or available-for-sale securities.
Minority Passive Investments
Investments in which the investor holds a non-controlling stake and does not actively participate in management.
Trading Securities
Securities that are purchased by a company not for long-term investment but rather with the intent to trade for short-term gains.
Available-For-Sale Securities
Financial assets that are intended to be sold before their maturity but are not classified as trading securities.
- Comprehend the differences in accounting treatments for trading, available-for-sale, and equity securities.
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Learning Objectives
- Comprehend the differences in accounting treatments for trading, available-for-sale, and equity securities.
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