Business Studies > Class Notes > INVESTMENT (INTRODUCTION TO FINANCE) FOR GREAT UNDERSTANDING OF FINANCE (All)
INVESTMENT (INTRODUCTION TO FINANCE) FOR GREAT UNDERSTANDING OF FINANCE
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Investments are the portion of a company's assets that represent a stake or investment in the performance of another entity. They include investments in other enterprises, such as bonds and notes, whi... ch are debt investments, and stocks, which are equity investments. These investments create value for the investor through market appreciation, dividends, interest earnings, and even ownership rights. While all types of investments may involve a financial commitment to other entities, investment in the stock of other companies is unique because it creates a direct ownership interest in the investee. This type of direct ownership raises complex financial accounting issues for a company. To resolve these issues, there are different accounting methods used in different circumstances, depending on the ownership circumstance, such as the cost method, the equity method, and the consolidation method. [Show More]
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