You will need to use the Accounting Standards Codification (ASC) to complete this assignment. You can access it through the free basic view on the FASB’s website https://asc.fasb.org/home. You should use the Accounting Issues Memo samples attached below as a guide of how your memo should be formatted and explain your research findings based on the below scenario. You should properly document your findings and include the ASC citation (in text cites).
Scenario:
Horizons Inc. has agreed to sell an investment in a subsidiary that has been accounted for on the equity method of accounting to a minority stockholder in exchange for the stockholder’s share in Horizons. Since the fair value of the investment exceeds its book value, Horizons CEO is considering recognizing a gain on the exchange. However, the new CFO at Horizons is recommending to the board of directors that the excess from the exchange be accounted as a credit to equity. Horizons turns to you for advice.
