Video: Equity Securities

In this lesson, Nick Palazzolo, CPA, dives deep into the intricacies of equity securities and their place in the market as a vehicle for ownership interest. He colorfully distinguishes between common and preferred stock, emphasizing their unique characteristics and shedding light on convertible debt and redeemable preferred stock. A particular focus is placed on the levels of ownership and the influence they wield on accounting treatments, ranging from the fair value method to equity method accounting. Nick provides clear examples of situations where significant influence may not be present and details the implications on equity accounting. He chats through the concepts with the ease of a seasoned professional, ensuring key points like the treatment of cash dividends, unrealized gains, and losses are well understood. Attention is also given to practical nuances, such as the different reporting requirements for available-for-sale and trading equity securities.