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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
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. The first one is done for you. (a) (b) (c) (d) 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. Aprivate company reporting under ASPE purchases 2. A private company reporting under ASPE purchases 25% of the common 5hares 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 and the common shares of the supplier are traded C trading.6.companyreportingcomparyforwhichquotedmarketprice.reportingunderASPEpurchasedsharesforAprivatecompanyreportingunderASPEpurchasedgovernmenttreasurybills.AprivateunderASPEpurchased15%ofthecommonsharesofatohold"thereisno
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