What is the fair value option? Where do companies that elect the fair value option report unrealized holding

Q: How should the capital market react to (a) the disclosure that a patent infringement suit involving…

A: Capital markets react with information provided by company and share prices of company will change…

Q: Why is the return associated with common stock referred to as a residual claim? Contrast this kind…

A: Common stock holders are the owners of the business. Profits earned by the company will be the…

Q: When is the fair value method used for recording interest in a separate company?

A: The methods for recording interest in a separate company are as follows: Fair value method Amortized…

Q: Defined by IFRS 2 as the difference between the fair value of the shares to which the counterparty…

A: IFRS or International Financial Reporting Standards are the guidelines of accounting given by the…

Q: hat is the proper treatment for noncash asset received from a stockholder? Group of answer choices…

A: Solution: When non cash asset received from a stockholders, its fair value should be debited to non…

Q: Preferred shareholders sometimes have the right of conversion. What does this means?

A: Preferred shareholders: Preferred shareholders are holding the preference shares in the company.…

Q: Investments in equity securities for which the investor has insignificant influence over the…

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: What are the advantages of using restricted stock to compensateemployees?

A: Restricted stock are the shares of a company, which is issued to its employees, but not entirely…

Q: Why woulda company hedge?

A: Hedging is the method of trading in an asset to offset the risk arising due to the volatility of…

Q: What are the issues with the book value and liquidation value per share approach?

A: Bok value per share measures the book value of the firm per share and represent the minimum value of…

Q: Explain which method you recommend they use and why. (a stock redemption buy-sell agreement or a…

A: Stock Redemption buy sell agreement : This agreement is also known as buy-out agreement or business…

Q: Why does the shareholder liability limited?

A: Shareholders generally hold shares of the company which is limited by shares. A company limited by…

Q: GW Underwriters retains the difference between its buying price and its offering price on new…

A: Underwriters are large financial institutions such as investment banks, insurance companies, banks,…

Q: The buyer of a Put Option has the right but not the obligation to sell the underlying stock. True…

A: A put option is a derivative contract giving the purchaser/owner the right, but not the obligation,…

Q: what is the difference between marketable equity securities held as financial asset at fair value…

A: Financial assets are the intangible assets, which are used as investment asset by the investors.…

Q: Which of the following is an example of protective rights? Rights to appoint or remove another…

A: Protective rights refers to the rights which are designed to protect the parties interest that holds…

Q: Which of the following statements is true when assessing whether potential voting rights contribute…

A: 1) When assessing whether or not possible voting rights assist control? All facts and situations…

Q: what are some risks that private equities encounter when they're buying a company

A: One of the better performing asset groups has been private equity (or "PE"), in part because…

Q: FASB allows debt to be shown at its fair market value. Consequently, if a company in financial…

A: Financial Accounting Standards Board (FASB) The FASB, located in Norwalk, Connecticut, is an…

Q: What are holding companies? What are theiradvantages and disadvantages?

A: Holding companies: Holding company is a corporation that does not carried out any processes,…

Q: When an acquirer chooses between cash offer or stock offer, which of the followings is the least…

A: Acquisition refers to obtaining the other company wholly or partially by paying the cash…

Q: Which of the following would NOT be included in the acquisition cost?

A: The acquistion cost is the total cost incurred in the acuistion of…

Q: Are the statemnets: both correct, both incorrect, or which one is correct? STATEMENT 1: Share…

A: Shares options are offered to the employees of the organization on fulfilling the vesting condition.…

Q: Do U.S. GAAP and IFRS differ in the amount of flexibility that companies have in electing the fair…

A:

Q: .Intrinsic valuation and relative valuation

A: Preference shares refer to the shares that enable the shareholders for receiving dividend that is…

Q: In your opinion, what is/are the problem/s with the Book Value per Share approach and the…

A: Book value per share is the ratio of dividend available for equity shareholders and number of…

Q: If a share issue is oversubscribed, what action can be taken in relation to excess money received on…

A: Shares are used by the compies to raise funds from the stock markets.

Q: Would companies going public use a negotiateddeal or a competitive bid?

A: A negotiated bid is a bid based upon negotiation with a chosen party, whereas competitive bidding is…

Q: What is the fair value option? Where do companies thatelect the fair value option report unrealized…

A:

Q: Companies are not required to, but have the option to, value some or all of their financial assets…

A: IFRS 9, deals with Financial Instruments. It provides for measurement and classification of various…

Q: What are the functions of the underwriters in an IPO?

A: Initial Public Offering Initial public offering refers to the process by which a company sells its…

Q: How shall an acquirer in a business combination account for the changes in fair value contingent…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: Companies are required to value non-controlling interests on the acquisition date. Wat approaches…

A: Non Controlling Interest at acquisition date is measured using two methods, they are Fair Value…

Q: What options does a company have if its board or management is opposed to an acquisition, a merger,…

A: Companies can use any of these defensive strategies to oppose an acquisition, merger or a takeover…

Q: What is the advantage and disadvantage of paying your employees stock option?

A: employee stock option plan is a plan that gives benefit to the employees ownership or shares in the…

Q: Because of the acquisition of additional investee shares, an investor will now change from the…

A: Equity method: Equity method is the method used for accounting equity investments which claim a…

Q: Equity accounting for intercorporate investment relies on book value. But if the ownership is an…

A: Intercorporate investment is defined as an investment where a company makes an investment in another…

Q: at is the partial equity metho

A: Partial equity method: The partial equity method may be a compromise between the initial value…

Q: Explain and discuss the preemptive right of common stockholders. Is this fair? Why or why not?

A: Common stockholders are actually the real owners of the corporation or company. Preemptive right is…

Q: Under which of the following market the shares once purchase cannot be sold again:

A: Explanation : The New issue market is the financial market where new shares are sold for the first…

Q: What is the fundamental difference in a general stock redemption vs. a Liquidating Distribution?…

A: Income tax is the payment required to be made to the authority which is charged to collect the…