In Substance,investments in Equity Securities May Be Classified As

question 3

Multiple Choice

In substance,investments in equity securities may be classified as:

• A) trading investments at fair value, where increments and decrements in the fair value of the investments are recognised in the income statement.
• B) available-for-sale investments.
• C) equity investments in subsidiaries, associates and joint venture entities.
• D) all of the above.

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Definitions:

Stock Repurchase

A business operation where a company repurchases its shares from the market, leading to a decrease in the total number of shares available.

Repurchase

Another method used to pay out a firm’s earnings to its owners, which provides more preferable tax treatment than dividends.

Shares Outstanding

The total number of shares of a corporation that have been issued and are held by shareholders.

Normal Course of Business

The regular, day-to-day activities and operations conducted by a company to generate revenue.