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Comprehensive Research Project

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Comprehensive Research Memorandum

Professional Research for Accountants

December 13, 2015

Comprehensive Research Memorandum

Motivation: The job of an investment management company is to oversee and manage the securities that, in this case for small to medium companies, companies acquire. A major part of his responsibility is to ensure the companies are receiving the maximum tax advantage possible. Also part of his responsibilities would be to recommend stock selection, and asset selection. This particular case is about a group whose Director is unsure of the accounting for gains and losses on securities. Additionally, he is unsure about the accounting treatment of realized and unrealized gains and losses on the investments which would include knowing if there is any impairment, if the impairment is temporary or otherwise for the securities the companies hold. This research yielded information to education the Director and his staff on the accounting of investment securities for his clients.
Problem Statement: How should ABC Investment Group account for treatment of unrealized gains and losses on bonds and under what conditions these securities may be impaired. If impaired, how to determine a write down and how to report in the financials.
Assumptions: Clients do not have significant influence over the financials of the companies they hold securities in. This research was confined to investment purchased by ABC’s clients and that none of the clients held any securities where they could influence the work or financials of the companies in which they purchased the securities. While any number of a company’s assets can have impairment, I limited my research to bonds which could be current or long term assets. Approach: This being my first research project, I started with learning what is research, how to research, how to develop a problem

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