What is unquoted equity instrument?

 Unquoted Equity Instruments are equity instruments

which fair values cannot be estimated reliably because said equity instruments does not usually
appear in neither active or inactive markets, or are no longer traded. PART 3: ACCOUNTING
FOR FINANCIAL ASSETS (15 minutes) What is Fair Value ( Based on PFRS13.)  In
PRFS/IRFS 13, fair value refers to the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
What is transaction cost?  Transaction costs are expenses incurred when we make any economic
trade (buying or selling) in a market. What is the initial measurement for FVTPL/ FVTOCI?
Transaction FVTPL FVTOCI What is the main difference? Initial Measurement Fair value Fair
value plus transaction cost Transaction costs are included as directly attributable cost of the
financial instrument in FVTOCI while in FVTPL, transaction costs are expenses immediately.
BTS Inc. acquired 12,000 shares of EXO Co. with a par value of 100 per share and a fair value
of 150 per share on January 1, 2020. Commission to brokers amounted to 5,000. Provide the
journal if the equity securities is designated as FVTPL or irrevocable elected as FVTOCI. Date
FVTPL FVTOCI January 1,2020 Trading Securities 1 800 000 Commission Fee 5 000 Cash 1
805 000 Investment in Eq. Securities -FVTOCI 1 805 000 Cash 1 805 000 *To be more
specific, we used a specific term ‘Investment on Equity Securities” instead of ‘Financial
Assets-OCI’ for FVTOCI* Subsequent measurement: On Dec 31, 2020 the fair value of the
equity securities is 2,000,000. Provide the journal entries. Date FVTPL FVTOCI Dec 31,2020
Trading Securities 200 000 Unrealized Gain 200 000 Investment in Eq. Securities -FVTOCI 195
000 Unrealized Gain – OCI 195 000 On Dec 31, 2021 the fair value of the equity securities is
1,500,000. Provide the journal entries. FVTPL FVTOCI Dec 31,2021 Unrealized Loss 500 000
Trading Securities 500 000 Unrealized Loss - OCI 500 00 Investment in Eq. Sec. – FVTOCI 500
000 On Dec 31, 2022 the BTS Company sold all the equity securities. The total proceeds
amounted to 2,100,000. Provide the journal entries. Date FVTPL FVTOCI Dec 31,2022 Cash 2
100 000 Gain on sale 600 000 Trading Securities 1 500 000 Investment in Eq. Securities –
FVTOCI 600 000 Unrealized Loss - OCI 305 000 Unrealized Gain – OCI 295 000 Dec 31,2022
Cast 2 100 000 Investment on Eq.Sec.-FVTOCI 2 100 000 Dec 31, 2022 Unrealized Gain – OCI
295 000 Retained Earnings 295 000 **We cannot transfer the whole 600 000 to the retained
earnings since there is a balance of 305 000 for the unrealized loss account, considering that the
value of the financial asset is less than the FA’s historical cost. FVTOCI (Simplified or
Alternative Entries): Cash 2 100 000 Financial Asset-FVTOCI 1 500 000 Retained Earnings 295
000 Unrealized Loss - OCI 305 000 1. What is the cumulative unrealized gain/loss –OCI on
December 31, 2020? 195 000
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