Question

Corporations frequently invest in securities issued by other corporations. Some investments are acquired to secure a favorable business relationship with another company. On the other hand, others are intended only to earn an investment return from the dividends or interest the securities pay or from increases in the market prices of the securities-the same motivations that might cause you to invest in stocks, bonds, or other securities. This diversity in investment objectives means no single accounting method is adequate to report every investment.

Merck & Co., Inc., invests in securities of other companies. Access Merck's 2016 10-K(which includes financial statements) using EDGAR at www.sec.gov. Note: Merck's 2016 financial statements were issued prior to the effective date of ASU 2016-01, so do not be surprised by the fact that Merck includes equity investments among its available-for-sale investments.

Questions:

1. What is the amount and classification of any AFS investment securities reported in the balance sheet? In which current and noncurrent asset categories are investments reported by Merck? Is there an amount you can't find in the balance sheet but that you know must be there?

Answer 1

Refer a below image for the above asked questions, in a detailed way of solution.

Answer: * what is the investment amount securities and reported classification of any AFS in the balance Sheet & Note 5 lists a of available for total sale fair value of $20,179 million investments. categories asset * are In which investments corrent and non corrent reported by Merck? million of Merci's 2016 balance sheet Investments as non corrent lists $ 11,416 assets. in the balance * Is there sheet but an amount you know you must can't be find there? It indicates that available for sale debt Securities of $7.8 billion were included in short-term investments. That leaves $963 million [ie, $20179 - ($1416+ $7800)] unidentified.