Book-Volume-1

Call Options – Summary

The accounting treatment of call options prima facie will depend upon the intention with which the call options are purchased—hedging or speculation (nonhedging). If the position is taken as a hedge against some other position, then the relevant accounting standards for hedge accounting will be applicable and there are certain conditions that are to be [...]

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Preface

by R. Venkata Subramani

Accounting for Investments attempts to give an exhaustive treatment of various accounting entries that should be recorded by any entity holding any financial asset. Over the past two decades there have been several innovative financial instruments from the Street that call for special treatment from the accounting, legal, and regulatory perspective. The accounting requirements are [...]

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Dr. K Sriram, Consulting Actuary

This book on “Accounting for Investments” is a pioneering work in demystifying the complex accounting mechanics associated with financial instruments – particularly the derivative instruments like options, futures, forwards and swaps. Based on his hard-won experience in this field, the author Venkata Subramani has presented a thorough and insightful view of the investment accounting process [...]

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Disclosures – Objective Questions

by R. Venkata Subramani

Objective Questions 1. When securities are transferred from trading securities to available-for-sale, then a. Gain/loss recognized as unrealized should be reversed. b. Gain/loss recognized as unrealized should not be reversed. c. Gain/loss recognized as unrealized will be adjusted with other comprehensive income. d. None of the above. 2. When securities are transferred from available-for-sale to [...]

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Disclosures – Theory Questions

by R. Venkata Subramani

Theory Questions Can the securities that are classified once be transferred to other category? If so, what precautions should be taken to adjust the unrealized gains or losses? How is the impairment of securities presented in the balance sheet? What is the treatment of stock dividend? Can you report this as income? How are the [...]

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ADR/GDR – Journal Questions

by R. Venkata Subramani

Journal Questions Question – 1 Prepare journal entries, general ledger, trial balance, income statement, and balance sheet for the following scenarios. ADR Conversion to Local Equity Shares—BRL Mark Antony Inc. traded in Bovespa shares in a Brazilian Stock Exchange through Henry Frank Brothers brokers and the details are as follows. Trade Details Date Product CCY [...]

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ADR/GDR – Objective Questions

by R. Venkata Subramani

Objective Questions 1. An instrument representing ownership interest in securities of a foreign issuer is referred to as a. An ownership certificate. b. A depositary receipt. c. An ownership receipt. d. None of the above. 2. Depositary receipts that are traded in an international market other than the United States are referred to as a. [...]

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ADR/GDR – Summary

by R. Venkata Subramani

A depositary receipt (DR) represents an ownership interest in securities of a foreign issuer typically trading outside its home market. ADR is a tradable instrument, and the depositary receipts that are trading in the United States are known as American depositary receipts, or ADRs. Depositary receipts that are traded in an international market outside the [...]

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Short Selling – Journal Questions

by R. Venkata Subramani

Journal Questions For the following scenario, prepare journal entries, general ledgers, trial balance, income statement, and balance sheet for Abdul Razack Inc. for the period January 1 through February 28. Box Position—Trade Currency BRL Abdul Razack Inc. traded in Coca-Cola shares in a Brazilian stock exchange through Pompoodle brokers and the details are as follows. [...]

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Short Selling – Objective Questions

by R. Venkata Subramani

Objective Questions 1. Short-selling is preferred by traders based on the expectation that the a. Price of the security will go up. b. Price of the security will go down. c. Price of the security will remain stable. d. None of the above. 2. The strategy allowing the investor to gain from the decline price [...]

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