Investment Losses

vitaly.korzhik asked:


Hi, I’m interested in IFRS accounting policies for investments in the units of mutual funds.
In my case, the mutual fund invests in some illiquid long-term assets like construction projects and property.
Any ideas would be highly appreciated!

ERICK

WPM asked:


How do I protect my investments from a Market Crash like what happened in 1929? I would also appreciate a recommended book that speaks on this subject.

RANDAL

angel_rat_83 asked:


(a) Accrued interest will be received be the seller even though it is not an interest payment date.
(b) An entry must be made to amortize a discount to the date of sale.
(c) The entry to amortize a premium to the date of sales includes a credit to the Premium on Investments in Debt Securities.
(d) A gain or loss on the sale is not extraordinary…I know it’s not this one.

WILLIAM

noaut0grafs asked:


2 questions!
1. From society’s point of view the economic function of profits and losses is to …??

2. Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, “At least I didn’t lose any money on my financial investment.” His economist friend points out that in effect he did lose money, because he could have received a 3 percent return on the $1000 if he had bought a bank certificate of deposit instead of the coins. The economist’s analysis in this case incorporates the idea of… what?

WADE

Dirk D asked:


Just wondering. Every time that huge losses are announced in the US, some middle eastern government investment firm seems to be investing more in the firm. Citibank is just one example. Are they just trying to prop up the dollar, or do they really think that US financial institutions are a good investment right now?

JONATHAN

Lyndon C asked:


I’ve asked this question of “business people” and can’t get a straight answer. If you had $10,000 to invest, you could put it in the bank and get about 5% without any risk of loss. You could invest it in the stock market and would expect to get a historical long term return of 8-10%. You could buy real estate and expect a long term historical appreciation rate of 3-6%, and maybe the crazy returns of the last housing boom of up to 15%, with no risk of loss (not counting inflation) if you hold long term (recent study says if you hold real property for many years, the nominal value of the property has always gone up).

Instead of these relatively safe ways to make money, what profit potential do you have to see in order to invest in a venture? I’m talking about starting a business where you give up a paycheck or have to devote significant time as part of your investment. Or if you own a store, deciding to carry a new item. Or when bidding a contract, setting the price/profit.

WILLIAMS

Luv2Answer asked:


I asked this yesterday and I only got 1 response so I’m posting again:
This is not homework! I am a bookkeeper at a small company and haven’t had to deal with this before. We recently sold $30,000 in Long Term Investments. I made a JE to Debit the Cash Account and Credit the Long Term Investment Asset on BS. I think I should have made a journal to hit the income statement for Recognized Gain/Loss on Investment. If I do, which I don’t know what it is yet, what the heck would be the Credit side of the entry. I have no idea what the cost or gain/loss was. We asked the broker to just cash out a specific dollar amount, not a certain fund or amount of shares. Please help. 10 points to best answer. Thank you!!!!!
These answers help but what is confusing me is that is looks like last year the previous accountant Debited - Recognized Gain/Loss on Sale and Credited - L/T Invesment Undeposited Cash. I have never even heard of such an account before. I guess what’s right is more important than what they did before because I’m going to be held accountable and need to support whatever I do.

GRANT