(See related pages)
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| Consolidated financial statements | Financial statements that show the results of all operations under the parent's control, including those of any subsidiaries; assets and liabilities of all affiliated companies are combined on a single balance sheet, revenues and expenses are combined on a single income statement, and cash flows are combined on a single cash flow statement as if the business were in fact a single company. (See page(s) 939) |
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| Control | When an investor can dominate all other shareholders in electing the corporation's board of directors and has control over the investee corporation's management. (See page(s) 938) |
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| Cost method | An accounting method used for long-term investments where the investor does not have significant influence over the investee. (See page(s) 936) |
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| Debt investment | Represents an amount owed and arises when one company lends money to another, such as in the case of a bond. Also called debt security. (See page(s) 928) |
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| Debt security | See debt investment. (See page(s) 928) |
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| Equity method | An accounting method used for long-term investments when the investor has significant influence over the investee; the investment account is initially debited for cost and then is increased to reflect the investor's share of the investee's earnings and decreased to reflect the investor's receipt of dividends paid by the investee. (See page(s) 936) |
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| Equity security | See share investment. (See page(s) 928) |
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| Foreign exchange rate | The price of one currency stated in terms of another currency. (See page(s) 943) |
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| Intercorporate investments | Debt and shares of one corporation purchased by another corporation. (See page(s) 928) |
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| Investee | The company whose debt or shares are being purchased. (See page(s) 928) |
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| Investment portfolio | A group of investments held by the investor. (See page(s) 929) |
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| Investor | The company that purchases as an investment the debt or shares of another. (See page(s) 928) |
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| Long-term investments | Investments in shares and bonds that are not marketable or, if marketable, are not intended to be converted into cash in the short term; also funds earmarked for a special purpose, such as land or other assets not used in the company's operations. (See page(s) 929) |
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| Lower of cost or market (LCM) | The required method of reporting temporary investments in marketable securities in the balance sheet at the lower of the total cost of all the investments (called the portfolio) or their market value on the balance sheet date. (See page(s) 930) |
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| Marketable securities | See temporary investments. (See page(s) 928) |
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| Minority interest | Investors who do not own more than 50% of the voting shares in a corporation. (See page(s) 950) |
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| Multinational business | A company that operates in a large number of different countries. (See page(s) 943) |
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| Parent company | A corporation that owns a controlling interest in another corporation (more than 50% of the voting shares is required). (See page(s) 938) |
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| Share investment | Represents one company's purchase of the shares in another company. Also called equity security (See page(s) 928) |
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| Short-term investments | See temporary investments. (See page(s) 928) |
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| Significant influence | The ability of the investor to influence the investee even though the investor owns less than 50% of the investee's voting shares. (See page(s) 936) |
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| Subsidiary | A corporation that is controlled by another corporation (the parent) because the parent owns more than 50% of the subsidiary's voting shares. (See page(s) 938) |
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| Temporary investments | Current assets that management generally expects to convert into cash within twelve months (or the operating cycle if longer); can be either debt or equity securities. (See page(s) 928) |