This is an excerpt from your book. I think that it is a good representation of application of the topics of the chapter.

Please write a few sentences addressing the marketing student in your group. Explain to him/her the applicable concepts that will quell the frustration.

Please read:

You are the lone accounting major in your five-member group in your Business Policy class. A part of the case your group is working on is the analysis of the financial statements of the Coca-Cola Company.

The marketing major in the group is confused by the following disclosure note from Coca-Cola's 2013 annual report:

NOTE 3: INVESTMENTS (in part)

Investments in debt and marketable securities, other than investments accounted for under the equity method, are classified as trading, available-for-sale or held-to-maturity. Our marketable equity investments are classified as either trading or available-for-sale with their cost basis determined by the specific identification method. Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading securities and realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in our consolidated balance sheets as a component of AOCI, except for the change in fair value attributable to the currency risk being hedged.

They say unrealized gains and losses on available-for-sale securities are reported as part of AOCI. What's that? I don't see these gains and losses on the income statement, he complained. And held-to-maturity securitieswhy are they treated differently? And what about equity method investments? On the balance sheet they have over $10 billion of investments accounted for under the equity method. They made over $600 million on those investments in 2013! Is that cash they can use?