What does Coca-Cola’s Form 10-K communicate about its short-term investments?

Picture of a bottle of Coca-ColaCoca-Cola is firmly entrenched in our history and culture.  On February 28, 2015, a Coca-Cola exhibition will open at the High Museum of Art in Atlanta.  The exhibition will feature paintings, photographs, and other items related to Coke’s iconic curved bottle. The exhibition will run through October 4, 2015. (Fun fact: Coca-Cola is sold in every country in the world except for North Korea and Cuba.)

The Coca-Cola Company (KO), like other U.S. publicly-held companies, files its financial statements in an annual filing called a Form 10-K with the Securities & Exchange Commission (SEC).

Coca-Cola has several assets that are listed on its balance sheet.  Let’s look at what is reported on Coca-Cola’s Form 10-K for “Short-term investments” and “Marketable securities.”

See the following excerpts from Coca-Cola’s 2013 Form 10-K:

  1. Partial Consolidated Balance Sheets containing current assets (page 76);
  2. Partial Note 3 regarding investments (page 89);
  3. Partial Recurring Fair Value Measurements note (page 122);
  4. Partial Statements of Income (page 74); and
  5. Partial Statements of Comprehensive Income (page 75.)


  1. How does Coca-Cola classify its investments in debt and marketable securities? How does Coca-Cola classify its investments in equity securities?
  2. Which gains and losses related to investments are included in the income statement? Which gains and losses related to investments are included in the consolidated balance sheets as a component of Other Comprehensive Income?
  3. Which categories of investments are adjusted to fair value?
  4. Let’s say that Coca-Cola has Apple stock that it has classified as a trading security. How and when will it determine the fair value of that Apple stock?
  5. Now let’s say that Coca-Cola has an investment in an equity security (stock) that is not traded on a daily exchange traded market. Assume that Coca-Cola has classified this investment as a trading security.  How and when will it determine the fair value of that equity security?
  6. Where can you find Consolidated Net Income on the excerpts of the financial statements included here?
  7. What does “unrealized” mean with respect to investments?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

  • Student handout (pdf) (word) (contains entire blog posting + discussion questions)
  • PowerPoint file (brief article overview + discussion questions)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

About Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Education.

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