An Exercise in Accounting for Marketable Securities

2 Pages Posted: 21 Oct 2008

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Abstract

This exercise illustrates the accounting for passive equity investments in other companies (marketable equity securities). It focuses specifically on equity securities classified as either trading securities or AFS securities. It is intended for use in an introductory financial accounting course to introduce the accounting for marketable equity securities. It may be used as a stand-alone exercise or followed by the Berkshire Hathaway Inc.—Intercorporate Investments (A) and (B) cases (UVA-C-2240 and UVA-C-2276). The instructor may also assign the technical note, “Accounting for Marketable Securities,” (UVA-C-2280) to accompany the case.

Excerpt

UVA-C-2277

AN EXERCISE IN ACCOUNTING FOR MARKETABLE SECURITIES

The New Company started business in 2003. During the year, it made the following investment purchases:

Purchase Date

Security

# of Shares Purchased

Purchase Price per Share

10/03/2003

. . .

Keywords: accounting investments, intercorporate investments, marketable securities, market value method, trading securities, available-for-sale securities AFS

Suggested Citation

Lynch, Luann J., An Exercise in Accounting for Marketable Securities. Darden Case No. UVA-C-2277, Available at SSRN: https://ssrn.com/abstract=1277010

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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