Chapter 9
Investments
433
AS-6 (
1
)
Shu Company follows ASPE and it is planning to invest in a 20-year debt security for the
purpose of selling it within six months to make a profit. Which method should Shu Company
use for accounting of this investment?
AS-7 (
1
)
YAL Inc. is planning to invest in a 20-year debt security with the intention to hold it until
maturity and receive interest revenue. Would YAL Inc. classify this debt security as a strategic
investment or non-strategic investment?
AS-8 (
1
)
X Company is planning to purchase 100,000 (or 5%) common shares of a US company to
alleviate some of the risks related to the exchange rate fluctuations between US dollars and
Canadian dollars. Which method should X Company use for accounting of this investment?
AS-9 (
1
)
LINIX Company is planning to purchase 100,000 (or 25%) common shares of another company
for the purpose of trading. Which method should LINIX Company use for accounting of this
investment?
