The Fasb Codification Topic 320 : Investments Debt And Equity Securities

1487 WordsAug 26, 20166 Pages
Overall. The FASB Codification Topic 320: Investments-Debt and Equity Securities is included under the financial statement asset section and offers guidance on investment instruments that represent either a creditor relationship (debt) or an ownership interest (equity) and provides standards for reporting such investments according to generally accepted accounting principles (GAAP) (FASB ASC 320-10-05-2, 2016). Debt securities included under this topic include any investment that would be considered a loan to a company, municipality or the government and its agencies. These include corporate or municipal bonds and U.S. Treasury securities and other instruments expressly stated within the codification. Equity securities covered under this section must have an easily attainable market value and include corporate stock, U.S. Treasury securities, and business investments greater than 20%. In this case, the code will dictate the method of accounting to be used as well as financial statement presentation. (GAAP) (FASB ASC 320-10-05-2, 2016). Subtopics. The use of subtopics is necessary in order to provide guidance that may be different from the overall topic as well as within each other. In this case, because different entity types require different treatment, there are seven subtopics which are presented as follow (FASB ASC 320, 2009): 1. 940-320 covers Financial Services-Brokers and Dealers 2. 942-320 covers Financial Services-Depository and Lending 3. 944-320 covers

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