NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
basis is other-than-temporary in accordance with the Companys policy and ASC 320. When the Company intends to sell an impaired debt security or it is
more-likely-than-not that it will be required to sell prior to recovery of its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. In these instances, the other-than-temporary
impairment loss is recognized in earnings equal to the entire excess of the debt securitys amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. When the Company does not
intend to sell an impaired debt security and it is more-likely-than-not that it will not be required to sell prior to recovery of its amortized cost basis, the Company must determine whether or not it will
recover its amortized cost basis. If the Company concludes that it will not, an other-than-temporary impairment exists and that portion of the credit loss is recognized in earnings, while the portion of loss related to all other factors is
recognized in other comprehensive income.
Investments not classified as trading or as held-to-maturity are classified as available-for-sale securities. Available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Realized gains or losses are included in earnings during
the period in which the gain or loss is realized. An impairment loss on the available-for-sale securities is recognized on the consolidated statements of comprehensive
income when the decline in value is determined to be other-than-temporary.
Other invested securities
Other invested securities represents the investments purchased by Baidu Wealth Management and resold to third-party investors. The transaction
does not meet the requirement of assets derecognition. The Company recorded the proceeds related to the transactions as Amount due to the third-party investors on the consolidated balance sheets.
The securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. The
trading securities are measured at fair value and the change in fair value is recorded in earnings in the period the change occurs.
Companys long-term investments consist of cost method investments, equity method investments, held-to-maturity investments with original and remaining maturities
of greater than twelve months, and available-for-sale investments.
In accordance with ASC subtopic 325-20 (ASC
325-20), InvestmentsOther: Cost Method Investments, the Company carries at cost its investments in investees which do not have readily determinable fair value and the Company does not have
significant influence. The Company only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Companys share of earnings since its investment.
Management regularly evaluates the impairment of the cost method investments based on the performance and financial position of the investee as
well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investees cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An
impairment loss is recognized in earnings equal to the excess of the investments cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis
of the investment.
Investments in entities in which the Company can exercise significant influence but does not own a majority equity
interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (ASC 323), InvestmentsEquity Method and Joint Ventures. Under the equity method, the