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Memo or Memorandum: It refers to one of the commonly used means of communication (i.e. official) in the business. Its primary objective is to give
Memo or Memorandum: It refers to one of the commonly used means of communication (i.e. official) in the business. Its primary objective is to give instructions or work as a reminder. The required Memo is as follows: To: The CEO From XYZ Date: 14.07.2021 Subject: Accounting method for investments. Accounting for investment generally depends upon the % of stock acquired from the stock holding in another firm or company. If the stock acquired is less than 20%, it is listed as available for sales securities or trading securities. Available for sale securities and trading securities are compared at the year-end with their fair values and any changes are accounted for as unrealized loss or gain in the other comprehensive income and statement of income respectively. If the stock acquired is between 20%-50%, the purchasing firm would have significant or more influence or impact over the other firm. Such investments are accounted for by practicing the equity method. In this method, the proportionate % of investment holding of the other firm's net income would be added back to the value of the investment at the year-end. If the stock acquired % is more than 50%, the investment is accounted for by
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