Investment Classification and Reporting Explained

Accounting for investments in securities depends on three factors:

(1) security type, either debt or equity,
(2) the company’s intent to hold the security either short term or long term, and
(3) the company’s (investor’s) percent ownership in the other company’s (investee’s) equity securities.

Exhibit 15.2 identifies five classes of securities using these three factors. It describes each of these five classes of securities and the standard reporting required under each class.

EXHIBIT 15.2 Investments in Securities