Pengantar Akuntansi Ii 3 SKS: Minggu 11

MINGGU 11
PENGANTAR AKUNTANSI II 3 SKS

• Pokok Bahasan/ Sub CPMK: INVESTASI
1. Investasi Kas pada: Investasi Sementara & Investasi Jangka Panjang
2. Akuntansi untuk Investasi pada obligasi
3. Akuntansi untuk Investasi pada saham/ Equitas
4. Metode Pencatatan Investasi: M. Equity & M.Cost
5. Akuntansi Investasi: Nilai Wajar →pada tanggal Laporan Posisi Keuangan
• Referensi:
1.Warren dkk, 2018, Pengantar Akuntansi II, Adaptasi Indonesia. Edisi 4 Jakarta, Salemba
Empat.
2. PSAK/IFRS/SAK ETAP
INVESTASI DAN Akuntansi Nilai Wajar/
Fair Value
Learning Objectives
Describe why companies invest in
debt and equity securities.
After studying this chapter, you
should be able to:
Describe and illustrate the

computation of dividend yield. Describe and illustrate the
accounting for debt investments.
LEARNING
OBJECTIVES
Describe fair value accounting Describe and illustrate the

and its effects on the financial accounting for equity
statements. investments.
Describe and illustrate valuing and

reporting investments in the
financial statements.
www.penerbitsalemba.com
Why Companies Invest
Most companies generate cash from their operations.

This cash can be used for the following purposes:
1. Investing in current operations
2. Investing in temporary investments to earn
additional revenue
3. Investing in long-term investments in stock of
other companies for strategic reasons
Investing Cash in Current Operations
To support its current level of

operations, a company also uses
cash to pay: expenses, suppliers
of merchandise and other
To expand its current assets, interest to creditors,
operations, cash may be dividends to stockholders
reinvested in the company
To replace worn-out
equipment or to
purchase new, more
efficient and productive
equipment
Investing Cash in Temporary Investments
▪ Investments or temporary
investments are reported in the
Current Assets section of the Investments
statement of financial position.
▪ The primary objective of investing
in temporary investments is to:
Debt Securities Equity Securities
1. earn interest revenue
2. receive dividends
3. realize gains from notes bonds
preferred
common stock
stock
increases in the market
price of the securities
Investing Cash in Long-Term Investments
Reduction of
costs Long-term
investments often
involve the purchase
Strategic Replacement of
of a significant
Integration
Purpose management
portion of the stock
of another company
and have a strategic
Expansion
purpose.
Accounting for Debt Investments
▪ Debt securities include The accounting for bond

notes and bonds, issued investments includes
by corporations and recording the following:
governmental purchase of bonds, interest
organizations. revenue, and sale of bonds
▪ Most companies invest
excess cash in bonds as
investments to earn
interest revenue.
Purchase of Bonds
▪ Assume that PT Angkasa purchases Rp18,000,000 of Indonesia Treasury bonds at

their face amount on March 17, 2016, plus accrued interest for 45 days. The bonds
have an interest rate of 6%, payable on July 31 and January 31. The entry to record
the purchase of the Treasury bonds is as follows:
2016
Mar. 17 Investments—Indonesia Treasury Bonds 18,000,000
Interest Receivable 135,000
Journal Entry Cash 18,135,000
Purchased Rp18,000,000, 6% Treasury bond.
▪ Because PT Angkasa purchased the bonds on March 17, it is also purchasing the
accrued interest for 45 days (January 31 to March 17), as shown in Exhibit 1. The
accrued interest of Rp135,000 is computed as follows:
Accrued Rp18,000,000 × 6% × (45/360) Rp135,000
Interest
Interest Revenue (slide 1 of 3)
▪ On July 31, PT Angkasa receives a semiannual interest payment of

Rp540,000 (Rp18,000,000 × 6% × ½). The Rp540,000 interest includes the
Rp135,000 accrued interest that PT Angkasa purchased with the bonds on
March 17. Thus, PT Angkasa has earned Rp405,000 (Rp540,000 –
Rp135,000) of interest revenue since purchasing the bonds, as shown in
Exhibit 1.
▪ The receipt of the interest on July 31 is recorded as follows:
2016
Jul. 31 Cash 540,000
Interest Receivable 135,000
Journal Entry Interest Revenue 405,000
Received semiannual interest.
▪ PT Angkasa’s accounting period ends on December 31. Thus, an

adjusting entry must be made to accrue interest for five months (August
1 to December 31) of Rp450,000 (Rp18,000,000 × 6% × 5/12), as shown
in Exhibit 1.
▪ The adjusting entry to record the accrued interest is as follows:

2016
Dec. 31 Interest Receivable 450,000
Interest Revenue 450,000
Journal Entry
Accrued 5 months of interest.
▪ For the year ended December 31, 2016, PT Angkasa would report
Interest Revenue of Rp855,000 (Rp405,000 + Rp450,000) as part
of Other Income on its income statement.
▪ The receipt of the semiannual interest of Rp540,000 on January

31, 2017, is recorded as follows:
2017
Jan. 31 Cash 540,000
Interest Revenue 90,000
Journal Entry Interest Receivable 450,000
Received semiannual interest.
Exhibit 1: Interest Timeline
Interest Purchase Interest End of Year Interest

Receipt Date Bonds Receipt Date Accrual Receipt Date
January 31, March 17 July 31 December 31 January 31,

2016 2017
Rp135,000 Rp405,000 Rp450,000 Interest Rp90,000

Interest Interest Revenue Revenue (earned) Interest Revenue
Receivable (earned) (earned)
Rp540,000 Interest Rp450,000 Rp540,000 Interest
Received in Cash Interest Accrued Received in Cash
Sale of Bonds (slide 1 of 2)
If the proceeds from the

sale exceed the book
value (cost) of the bonds,
then a gain is recorded
If the proceeds are less

than the book value
(cost) of the bonds, a loss
is recorded
Sale of Bonds (slide 2 of 2)
▪ On January 31, 2017, PT Angkasa sells the Treasury bonds at 98, which is
a price equal to 98% of their face amount. The sale results in a loss of
Rp360,000, computed as follows:
Proceeds from sale Rp17,640,000* There is no accrued
interest upon the sale
Less book value (cost) of the bonds 18,000,000 because the interest
Loss on sale of bonds Rp (360,000) payment date is also
January 31
*Rp18,000,000 × 98%
▪ The entry to record the sale is as follows:

2017
Jan. 31 Cash 17,640,000
Loss on Sale of Investment 360,000
Journal Entry Investment—Indonesia Treasury Bonds 18,000,000
Sold Indonesia Treasury bonds.
Accounting for Equity Investments
Investor
▪ A company may invest in the preferred or The company
common stock of another company. investing in
another
▪ The percent of the investee’s outstanding company’s stock
stock purchased by the investor
determines the degree of control that the
Investee
investor has over the investee. This, in The company
turn, determines the accounting method whose stock is
used to record the stock investment, as purchased
shown in Exhibit 2.
Exhibit 2: Stock Investments
Percent of Outstanding Degree of Control of

Stock Owned by Investor Investor over Investee Accounting Method
Less than 20% No control Cost method
Between 20% and 50% Significant influence Equity method
Greater than 50% Control Consolidation
Cost Method: Less Than 20% Ownership
Under the cost

If the investor method, entries are
purchases less than Investments of less recorded for the
20% of the than 20% of the following
outstanding stock of investee’s outstanding transactions:
the investee, the stock are accounted
• Purchase of stock
investor is considered for using the cost
• Receipt of dividends
to have no control method • Sale of stock
over the investee
Cost Method: Less Than 20% Ownership—
Purchase of Stock
▪ Assume that on May 1, PT Bumi Kencana purchases 2,000 shares
of PT Indraprasta common stock at Rp49,900 per share plus a
brokerage commission of Rp200,000. The purchase of stock is
recorded at its cost. Any
brokerage commissions
are included as part of the
cost.
▪ The entry to record the purchase of the stock is as follows:

May 1 Investment—PT Indraprasta Stock 100,000,000
Cash 100,000,000
Journal Entry
Purchased 2,000 shares of PT Indraprasta
common stock [(Rp49,900 × 2,000 shares) +
Rp200,000].
Receipt of Dividends
▪ On July 31, PT Bumi Kencana receives a dividend of Rp400 per share
from PT Indraprasta.
▪ The entry to record the receipt of the dividend is as follows:
Jul. 31 Cash 800,000

Dividend Revenue 800,000
Journal Entry
Received dividend on PT Indraprasta
common stock (Rp400 × 2,000 shares).
▪ Dividend revenue is reported as part of Other income on PT Bumi

Kencana’s income statement.
Sale of Stocks
▪ On September 1, PT Bumi Kencana sells 1,500 shares of PT Indraprasta stock for
Rp54,500 per share, less a Rp160,000 commission. The sale results in a gain of
Rp6,590,000, computed as follows:
Proceeds from sale Rp81,590,000* The gain on the sale of
Book value (cost) of the stocks 75,000,000** investments is reported
Gain on sale Rp 6,590,000 as part of Other Income
*(Rp54,500 × 1,500 shares) – Rp160,000
on PT Bumi Kencana’s
**(Rp100,000,000/2,000 shares) × 1,500 shares income statement.
Sep. 1 Cash
81,590,000
Gain on Sale of Investment 6,590,000
Investments—PT Indraprasta Stock 75,000,000
Journal Entry
Sold 1,500 shares of PT Indraprasta common
stock.
Equity Method: Between 20%–50% Ownership
If the investor purchases between 20% and 50% of the outstanding stock of the investee, the
investor is considered to have a significant influence over the investee
Investments of between 20% and 50% of the investee’s outstanding stock are accounted for using
the equity method.
Under the equity method, the investment account is adjusted for the
investor’s share of the net income and dividends of PSAK
the investee:
Insight:
• Net income PSAK 15 or IAS 28 (investments
on associates and joint venture)
• Dividends
provides standards on how to
implement equity method
accounting if the company has
investment in associates and
www.penerbitsalemba.com joint venture.
Equity Method: Between 20%–50% Ownership —
Purchase of Stock
▪ Assume that PT Sinar Purnama purchased its 40% interest in
PT Flamingo’s common stock on January 2, 2016, for
Rp350,000,000.
▪ The entry to record the purchase is as follows:

2016
Jan. 2 Investment in PT Flamingo Stock 350,000,000
Cash 350,000,000
Journal Entry
Purchased 40% of PT Flamingo Corporation
stock.
Recording Investee Net Income
▪ For the year ended December 31, 2016, PT Flamingo reported net income of
Rp105,000,000. Under the equity method, PT Sinar Purnama (the investor) records
its share of PT Flamingo net income, as follows:
2016
Des. 31 Investment in PT Flamingo Stock
42,000,000
Income of PT Flamingo 42,000,000
Journal Entry
Recorded 40% share of PT Flamingo Corporation
net income, Rp105,000,000 × 40%.
▪ Income of PT Flamingo is reported on PT Sinar Purnama’s income statement.

Depending on its significance, it may be reported separately or as part of Other
Income.
▪ If PT Flamingo had a loss during the period, then the journal entry would be a debit
to Loss of PT Flamingo and a credit to the investment account.
Recording Investee Dividends
▪ During the year, PT Flamingo declared and paid cash dividends of
Rp45,000,000. Under the equity method, PT Sinar Purnama (the
investor) records its share of PT Flamingo dividends as follows:
2016
Dec. 31 Cash 18,000,000
Investment in PT Flamingo Stock 18,000,000
Journal Entry
Recorded 40% share of PT Flamingo Corporation
dividends, Rp45,000,000 × 40%.
▪ The effect of recording 40% of PT Flamingo’s net income and dividends

is to increase the investment account by Rp24,000,000 (Rp42,000,000 –
Rp18,000,000). Thus, Investment in PT Flamingo Stock increases from
Rp350,000,000 to Rp374,000,000, as shown in shown in Exhibit 3.
Exhibit 3: Investment and Dividends
Investment in 40% of PT 40% of PT

Investment in PT
PT Flamingo Flamingo’s net Flamingo’s
Flamingo stock
income cash dividends
Rp374,000,000
Rp350,000,000 Rp42,000,000 Rp18,000,000
(40% interest)
(40% interest)
Rp24,000,000
net increase
Sale of Stocks
▪ If PT Sinar Purnama sold PT Flamingo’s stock on January 1, 2017, for
Rp400,000,000, a gain of Rp26,000,000 would be reported, computed as follows:
Proceeds from sale Rp400,000,000
A gain is recorded if the
Book value of stock investment 374,000,000 proceeds exceed the book
Gain on sale Rp 26,000,000 value of the investment.
A loss is recorded if the
proceeds are less than the
book value of the
investment.
2017
Jan. 1 Cash 400,000,000
Investment in PT Flamingo Stock 374,000,000
Gain on Sale of PT Flamingo Stock 26,000,000
Journal Entry
Sold PT Flamingo stock.

Consolidation: More Than 50% Ownership
A corporation owning
The purchase of more
all or a majority of the The corporation that Combined financial
than 50% ownership
voting stock of is controlled is called statements are called
of the investee’s stock
another corporation is the subsidiary consolidated financial
is termed a business
called a parent company statements
combination
company
Valuing and Reporting Investments
Classification ▪ Generally accepted accounting

principles (SAK) allows some
Trading securities debt securities, and requires
equity securities where there
Available-for-sale is less than a 20% ownership
securities interest to be valued in the
accounting records and
Held-to-maturity financial statements at their
securities
fair market values.
Trading Securities (slide 1 of 3)
▪ Trading securities are debt and equity securities that are

purchased to earn short-term profits from changes in their
market prices.
▪ Trading securities are valued as a portfolio (group) of
securities using the securities’ fair values.
✓ Fair value is the market price that the company would
receive for a security if it were sold.
▪ A change in the fair value of the portfolio (group) of trading
securities is recognized as an unrealized gain or loss for the
period.
▪ Assume PT Mulia purchased a portfolio of trading securities during 2016. On
December 31, 2016, the cost and fair values of the securities were as follows:
Name Number of Shares Total Cost Total Fair Value
PT Asahan 400 Rp 5,000,000 Rp 7,200,000
PT Milenium 500 Rp11,000,000 Rp 7,500,000
PT Piawai 200 Rp 8,000,000 Rp10,600,000
Total Rp24,000,000 Rp25,300,000
▪ The adjusting entry on December 31, 2016, to record the fair value of the
portfolio of trading securities is as follows:
2016
Dec. 31 Valuation Allowance for Trading Investments 1,300,000
Unrealized Gain on Trading Investments 1,300,000
Journal Entry
To record increase in fair value of trading
securities.
▪ The valuation allowance is reported on the December 31,

2016, statement of financial position as follows:
PT Mulia
Statement of Financial Position (selected items)
December 31, 2016
Current assets:
Cash Rp120,000,000
Trading investments (at cost) Rp24,000,000
Plus valuation allowance for trading investments Rp 1,300,000
Trading investments (at fair value) Rp 25,300,000
Available-for-Sale Securities (slide 1 of 3)
▪ Available-for-sale securities are debt and equity securities

that are neither held for trading, held to maturity, nor held
for strategic reasons.
▪ Changes in the fair values of trading securities are reported
as an unrealized gain or loss on the income statement. In
contrast, changes in the fair values of available-for-sale
securities are reported as part of stockholders’ equity and,
thus, excluded from the income statement.
▪ Assume that PT Mulia purchased the three securities during 2016 as available-for-sale
securities. On December 31, 2016, the cost and fair values of the securities were as
follows:
Name Number of Shares Total Cost Total Fair Value
PT Asahan 400 Rp 5,000,000 Rp 7,200,000
PT Milenium 500 Rp11,000,000 Rp 7,500,000
PT Piawai 200 Rp 8,000,000 Rp10,600,000
Total Rp24,000,000 Rp25,300,000
▪ The adjusting entry on December 31, 2016, to record the fair value of the portfolio of
available-for-sale securities is as follows:
2016
Dec. 31 Valuation Allowance for Available-for-Sale
Investments 1,300,000
Unrealized Gain (Loss) on Available-for- 1,300,000
Journal Entry
Sale Investments
To record increase in fair value of available-for-

sale investments.
▪ The valuation allowance and the unrealized gain are reported on the December 31,
2016, statement of financial position as follows:
PT Mulia
Statement of Financial Position
December 31, 2016
Current assets:
Cash Rp120,000,000
Available-for-sale investments (at cost) Rp24,000,000
Plus valuation allowance for available-for-sale investments Rp 1,300,000
Available-for-sale investments (at fair value) Rp 25,300,000
Equal
Stockholders’ equity:
Common stock Rp 10,000,000
Paid-in capital in excess of par Rp150,000,000
Retained earnings Rp250,000,000
Unrealized gain (loss) on available-for-sale investments Rp 1,300,000
Total stockholders’ equity www.penerbitsalemba.com Rp411,300,000
Held-to-Maturity Securities
Classification: Held-to-maturity
securities are primarily
• securities with purchased to earn
maturity dates interest revenue
• notes
• bonds
Definition: Debt
investments, such as
Reporting:
I notes or bonds, that a
company intends to hold
until their maturity date
Held-to-maturity bond
investments are reported on
the statement of financial
position at their amortized
cost
If a held-to-maturity security will
mature within a year, it is reported as
a current asset on the statement of
Recording: financial position. Held-to-maturity
Held-to-maturity securities maturing beyond a year are
bond investments are reported as noncurrent assets
recorded at their cost
Exhibit 4: Summary of Valuing and Reporting of
Investments
Trading Available-for-Sale Held-to-Maturity
Securities Securities Securities
Valued at: Fair Value Fair Value Amortized Cost
Changes in valuation Unrealized gain or loss in Accumulated unrealized Not applicable. Held-to-
are reported as: the income statement as gain or loss is reported in Maturity Securities are
Other income (loss). stockholders’ equity on the reported at cost.*
balance sheet.
Reported on the balance Cost of investments plus or Cost of investments plus or Amortized cost of
sheet as: minus valuation allowance. minus valuation allowance. investment.
Classified on balance sheet A current asset. Either as a current or Either as a current or

as: noncurrent asset, noncurrent asset,
depending on depending on remaining
management’s intent. term to maturity.
*Premium or discount amortization is reported as part of interest revenue on the income statement.
Summary (slide 1 of 3)
Assets
Current assets:
Cash and cash equivalents Rp235,000,000
Trading investments (at cost) Rp420,000,000
Plus valuation allowance for trading investment 45,000,000 465,000,000
Accounts receivable Rp305,000,000
Less allowance for doubtful accounts 12,300,000 292,700,000
Merchandise inventory—at lower of cost
(FIFO method) or market 120,000,000
Prepaid insurance 24,000,000
Total current assets
Rp1,136,700,000
Investments:
Investment in Nikmat Coffee (equity method)
565,000,000 www.penerbitsalemba.com
Summary (slide 2 of 3)
Revenue from sales:

Sales Rp5,450,000,000
Less: Sales return and allowances Rp26,500,000
Sales discounts 21,400,000 47,900,000
Sales Rp5,402,100,000
Cost of merchandise sold 2,160,000,000
Gross profit Rp3,242,100,000
Total operating expenses 2,608,700,000
Income from operations Rp 633,400,000
Other income and expense:
Interest revenue Rp 18,000,000
Interest expense (136,000,000)
Loss on disposal of fixed asset (23,000,000)
Unrealized gain on trading investments 5,000,000
Equity income in Nikmat Coffee 57,000,000 Rp (79,000,000)
Income before income taxes Rp 554,400,000
Income tax expense 132,800,000
Net income Rp 421,600,000
Fair Value Accounting
Fair value is the price that would be received from selling an asset
Fair value assumes that this transaction occurs under normal business
conditions
Accounting standards require trading and available-for-sale investments to

be recorded at their fair value
Effect of Fair Value Accounting on the Financial
Statements
• Changes in the fair value of available-for-sale
Statement securities are not recognized on the income
statement, but are included as part of
stockholders’ equity through the comprehensive
of Financial income and accumulated other comprehensive
income accounts.
Position
• Instead of recording the changes in the fair values
Income of trading securities as part of stockholders’ equity,

the unrealized gains or losses are reported on the
income statement. PSAK Insight:
Statement PSAK 68 Pengukuran Nilai Wajar
provides guidance on how to measure
fair value. PSAK 68 is an adoption
from IFRS 13 Fair Value Measurement.
Market Value is only one of type of fair
value in the standard. If market value is
not available, PSAK 68 allows other type of fair value
www.penerbitsalemba.com measurements.
Financial Analysis and Interpretation: Dividend
Yield (slide 1 of 3)
▪ The dividend yield measures the rate of return to

stockholders, based on cash dividends.
▪ Dividend yield is most often computed for common stock
because preferred stock has a stated dividend rate.
▪ The dividend yield is computed as follows:
Dividen per Lembar Saham Biasa

Dividend Yield
Harga Pasar per Lembar Saham Biasa
▪ The market price of PT Telkom Indonesia (Persero) Tbk. was
Rp4,150 on April 21, 2017. During the preceding year, PT Telkom
Indonesia (Persero) Tbk. had paid dividends of Rp136.747 per share.
Thus, the dividend yield of PT Telkom Indonesia (Persero) Tbk.’s
common stock is computed as follows:
Rp136.747
Dividend Yield 3.29%

Rp4,150
▪ The dividend yield is first a ▪ Recent dividend yields for some selected
function of a company’s companies are as follows:
profitability (ability to pay a Dividend Yield
Company (%)
dividend) and management’s
alternative use of funds. PT Telkom Indonesia (Persero) Tbk. 3.17
▪ Current dividend yields are PT Astra Otoparts Tbk. 1.74

provided with news service PT Garuda Indonesia (Persero) Tbk. None
quotations of market prices, PT IndosatTbk. 1.31
such as The Wall Street PT Summarecon Agung Tbk. 0.56
Journal, Yahoo! Finance, and PT Bank Mandiri (Persero) Tbk. 1.79
Google Finance. PT Wijaya Karya (Persero) Tbk. 1.88
PT Semen Indonesia (Persero) Tbk. 3.08
Appendix: Comprehensive Income (slide 1 of 4)
▪ Comprehensive income is defined as all changes in stockholders’

equity during a period, except those resulting from dividends and
stockholders’ investments.
▪ Comprehensive income is computed by adding or subtracting

other comprehensive income to (from) net income, as follows:
Net income RpXXX

Other comprehensive income RpXXX
Comprehensive income RpXXX
▪ Other comprehensive income items include unrealized gains and losses

on available-for-sale securities as well as other items such as foreign
currency and pension liability adjustments.
▪ The cumulative effect of other comprehensive income is reported on
the statement of financial position, as accumulated other
comprehensive income.
▪ Companies are required to report comprehensive income in the
financial statements in one of the following two ways:
1. On the income statement, or
2. In a separate statement of comprehensive income that
immediately follows the income statement
▪ This unrealized gain would be reported in the Stockholders’ Equity section
of PT Mulia’s 2016 statement of financial position, as follows:
Paid-in-capital in excess of par 150,000,000
Retained earnings 250,000,000
Unrealized gain (loss) on available-for-sale investments 1,300,000
Total stockholders’ equity Rp411,300,000
▪ Alternatively, PT Mulia could have reported the unrealized gain as part of
accumulated other comprehensive income as follows:
Paid-in-capital in excess of par 150,000,000
Retained earnings 250,000,000
Accumulated other comprehensive income:
Unrealized gain (loss) on available-for-sale investments 1,300,000
Total stockholders’ equity Rp411,300,000
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Pengantar Akuntansi Ii 3 SKS: Minggu 11

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MINGGU 11

PENGANTAR AKUNTANSI II 3 SKS

Describe and illustrate the

Describe fair value accounting Describe and illustrate the

Describe and illustrate valuing and

Most companies generate cash from their operations.

To support its current level of

▪ Debt securities include The accounting for bond

▪ Assume that PT Angkasa purchases Rp18,000,000 of Indonesia Treasury bonds at

Purchased Rp18,000,000, 6% Treasury bond.

▪ On July 31, PT Angkasa receives a semiannual interest payment of

Received semiannual interest.

▪ PT Angkasa’s accounting period ends on December 31. Thus, an

▪ The adjusting entry to record the accrued interest is as follows:

▪ The receipt of the semiannual interest of Rp540,000 on January

Received semiannual interest.

Interest Purchase Interest End of Year Interest

January 31, March 17 July 31 December 31 January 31,

Rp135,000 Rp405,000 Rp450,000 Interest Rp90,000

If the proceeds from the

If the proceeds are less

▪ The entry to record the sale is as follows:

Sold Indonesia Treasury bonds.

Percent of Outstanding Degree of Control of

Less than 20% No control Cost method

Between 20% and 50% Significant influence Equity method

Greater than 50% Control Consolidation

Under the cost

▪ The entry to record the purchase of the stock is as follows:

Jul. 31 Cash 800,000

▪ Dividend revenue is reported as part of Other income on PT Bumi

▪ The entry to record the purchase is as follows:

▪ Income of PT Flamingo is reported on PT Sinar Purnama’s income statement.

▪ The effect of recording 40% of PT Flamingo’s net income and dividends

Investment in 40% of PT 40% of PT

Sold PT Flamingo stock.

Classification ▪ Generally accepted accounting

▪ Trading securities are debt and equity securities that are

▪ The valuation allowance is reported on the December 31,

▪ Available-for-sale securities are debt and equity securities

To record increase in fair value of available-for-

Classified on balance sheet A current asset. Either as a current or Either as a current or

Revenue from sales:

Accounting standards require trading and available-for-sale investments to

• Instead of recording the changes in the fair values

Income of trading securities as part of stockholders’ equity,

▪ The dividend yield measures the rate of return to

Dividen per Lembar Saham Biasa

Dividend Yield 3.29%

▪ Current dividend yields are PT Astra Otoparts Tbk. 1.74

▪ Comprehensive income is defined as all changes in stockholders’

▪ Comprehensive income is computed by adding or subtracting

Net income RpXXX

▪ Other comprehensive income items include unrealized gains and losses

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