Answer:
C. Club should decrease the balance in the investment account to the current value and recognize a loss on the income statement.
Explanation:
Club SHOULD account for the decline in value by decreasing the balance in the investment account because it is stated in IAS 28 that when the 'carrying amount' which is the book value of an investment in an another company's shares <u>exceeds</u> the amount at which that investment can be disposed which is its 'recoverable amount', an impairment loss is recognized. The loss should be posted directly to the investment account.
Hence the investment account will be credited and the corresponding debit will go to the income statement.
The assistant manager is most likely to do this <span />
Strategically, a company may phase out or sell an SBU this is known as DIVESTMENT.
Divestment is the process of selling an asset to obtain financial goals. Divesting involves a company selling its assets to improve its value and obtain higher efficiency.
Answer:
b. higher; lower
Explanation:
Yield on securities is decided on the basis of risk level and the period to maturity. High risk high return concept is applicable here with an investment for long time. Liquidity is defined as the conversion of investment into cash. So, it you invest in short term security you will have higher liquidity because you can convert your investment in cash in short time and vice versa.
