Investment Evaluation and Accounting Treatment (v23) – Self Study Course

Course Description

This course can benefit accountants, as well as business managers, that want to understand how financial ratios and other forms of analyses can be used to evaluate a business.  This course also covers the investment classifications and investment accounting used by companies to record investments within their financial statements.

Learning Objectives

Upon successful completion of this course participant should be able to be complete the following objectives:

• Describe the various company evaluation techniques including vertical, horizontal, and ratio analysis that can be used.
• Demonstrate an understanding of various company ratios for liquidity and efficiency, solvency, profitability, and market prospects.
• Compute various company ratios for liquidity and efficiency, solvency, profitability, and market prospects.
• Compute the DuPont Analysis given the appropriate company information.
• Demonstrate an understanding of basic bond valuation including recording a bond acquisition and interest revenue.
• Describe the various accounting classifications including held-to-maturity, trading, and available-for-sale for debt securities.
• Demonstrate an understanding of sales and impairments of debt investments.
• Demonstrate an understanding of the financial statements’ presentations, international reporting standards, and the fair value option of debt investments.
• Discuss what is meant by significant influence and how it effects the accounting classification of equity investments.
• Explain the recording of the purchase of equity investments.
• Demonstrate an understanding of how dividends, changes in fair value, impairment, and the sale of an equity investment are recorded under the fair value through the net income approach.
• Explain the financial statement presentation under the fair value through the net income approach.
• Demonstrate an understanding of the recording of investment revenue, receipt of dividends, and additional adjustments under the equity method approach.
• Explain the financial statement presentation under the equity method approach.
• Discuss the fair value option under the equity method approach. 
•  Demonstrate an understanding of the recording of investment revenue, receipt of dividends, and recording of additional adjustment under the equity method approach.
• Demonstrate an understanding of the consolidation method including the concept of noncontrolling interest and the consolidated financial statements.
• Explain where various investment types are presented within the financial statements.

CPE Credits: 4 CPE for CPAs

Level: Basic

Instructional Method: Self-Study

NASBA Field of Study: Accounting

Program Prerequisites: None

Advanced Preparation: None

Revision Date: March 17, 2023