Long-term investment refers to foreign investment with an investment period of 1 year (inclusive). The long-term investment of an enterprise includes foreign investment such as creditor's rights investment, other creditor's rights investment, long-term equity investment and other equity instruments investment.
Second, long-term equity investment.
1, concept
Long-term equity investment refers to the equity investment held by an enterprise in its subsidiaries, joint ventures and associated enterprises, as well as the equity investment held by an enterprise that has control, joint control or significant influence on the invested entity. There is no quotation in the active market, and the fair value cannot be measured reliably. The types of long-term equity investment mainly include long-term equity investment formed by the merger of enterprises under the same control and long-term equity investment formed under different controls.
2. Accounting method
There are two accounting methods for long-term equity investment: cost method and equity method.
(1) cost method
① The enterprise can control the long-term equity investment of the invested unit. That is, the long-term equity investment of enterprises in subsidiaries.
(2) An enterprise can implement long-term equity investment that does not control, has the same control or has significant influence on the investee, and has no quotation in the active market, and its fair value cannot be reliably measured.
(2) Equity method
(1) Long-term equity investment by enterprises in invested units. That is, the enterprise's long-term equity investment in its joint venture.
② Long-term equity investment that the enterprise has a significant impact on the invested entity. That is, the enterprise's long-term equity investment in its affiliated enterprises.