Key Terms: Chapter Nine
A concept of income by which virtually all nonequity-based transactions and events are captured and reported in the income statement; the preferred approach for income theory
The approach mandated for held-to-maturity securities; investments are reported at their cost with any premium or discount amortized over the life of the investment
Investments that are neither "held-to-maturity" or "trading;" a default category that is accounted for at fair value with changes in value recognized in other comprehensive income
To prepare financial reports for a parent and subsidiary company as a single economic unit
A concept of income where income is limited to transactions related to central ongoing operations; not an acceptable approach for income theory
The difference between face value and issue price of a bond, where the issue price is less; causes the effective yield to be higher than that stated
Method to account for stock investment when significant influence is present; changes in equity of the investee are recognized by the investor on a pro rata basis
The excess of the purchase price of an acquired company over the fair value of the identifiable net assets acquired
Investments purchased with intent to hold to maturity; usually investment in debt; accounted for by amortized cost method
The company in which another has an investment
The amount a company receives in exchange for the initial issue of debt or other financial instrument
An account for changes in value of available for sale securities; not part of income from continuing operations and generally positioned as a special category within equity
The face or contract amount of a bond; the amount to be repaid at maturity along with any interest
The difference between face value and issue price of a bond, where the issue price is more; causes the effective yield to be lower than that stated
The ability to sway management and decision making of another entity, but generally not enough to assert absolute control
A method for amortizing premiums and discounts on bonds; the premium or discount is spread uniformly over the life of the bond as an adjustment of interest