Quoted investment occurs during the issue of bonds and determines how shares and bonds will be honored at maturity. There is an active market for such investments, they are valued at the closing price of the offer as at a specific balance sheet date. This is investment in various financial securities (shares, debentures) that exist on the spare market and are listed there. If the company has quoted investments, they will appear in the balance sheet at the purchase price together with a note showing their market value.
Quoted investment company
Quoted investment companies aim to invest on behalf of their shareholders and exist as the object of trading on the stock exchange. The investment in the quoted investment company is a way to transfer management tasks espert – the investment manager.
The management in the quoted investment company is tasked with caring for its interests. Most of these boards are completely independent of the person managing the fund, which means that they can exert pressure to keep running costs as low as possible and even replace the manager. Quoted investment companies can invest in items that can not be sold quickly, this is because the company does not have to worry about things like short-term cash flow.
The ease of valuation of a quoted investment company's investment affects how often net asset values are published by it. The net asset value is the value of fund assets reduced of the fund's liabilities on the day of the valuation. It is also calculated for the investment unit or certificate by dividing the net asset value of the fund on the day of the valuation by the number of units or certificates recorded on the register or participant records on the day of the valuation.
Quotable investment companies let invest in :
- spreading investment in an easier way
- the investment which is more space-efficient,
which allows saving money on transactions and investing small amounts of money.
Characteristics of Quoted investment company
Quoted investment company is characterized by:
- Structure: fixed number of shares
- Long-term view: no need to worry about short-term cash flows
- Choice of assets: possibility to invest in illiquid assets
- Prices: Based on supply and demand
- Trading: Quoted on astock exchange
- Board of directors: Independent and representative
- Borrowing: possibility to borrow to enhance returns
- (E. Talmor, (2011), p. 36)
- (M. A. Crawford, (2008) p. 6-7)
- (S. Caselli, (2012), p. 274)
- (BPP Learning Media, (2010), p. 137)
- BPP Learning Media, (2010), ACCA Paper P6 Advanced Taxation FA2008 Practice and Revision Kit, BPP Learning Media, p. 137
- Caselli S. and others, (2012), Venture Capital: A Euro-System Approach, Springer Science & Business Media, p. 274
- Crawford M. A., (2008), Governmental GAAP Guide 2009, CCH, p. 6-7
- Talmor E. and others, (2011), International Private Equity, John Wiley & Sons, p.36.
Author: Justyna Urbanik