The way in which a company accounts for its investments is determined by the nature and purpose of the investment. For each of the following investment situations, indicate if the investment

(a)would be considered a debt or equity investment,

(b)is a strategic or non-strategic investment,

(c)should be classified as a current or a non-current asset, and

(d)should be reported at cost, amortized cost, fair value, or equity.

1.

A public company reporting under IFRS purchases 25% of the common shares of one of its suppliers to ensure a reliable source of raw materials. The ownership percentage provides significant influence.

2.		A private company reporting under ASPE purchases 25% of the common shares of one of its suppliers to ensure a reliable source of raw materials. They paid $2 above the market price. The ownership percentage does not provide significant influence but the common shares of the supplier are traded on the stock market.
3.		A company reporting under IFRS purchased 10-year bonds to earn interest income.
4.		A public company reporting under IFRS purchased common shares from another company, with plans to sell them if the share price increases.
5.		A private company reporting under ASPE purchased shares for trading.
6.		A private company reporting under ASPE purchased government treasury bills.
7.		A private company reporting under ASPE purchased 15% of the common shares of a company "to hold" for which there is no quoted market price.