(Based on Appendix 12B) Reporting an investment at its fair value requires adjusting its carrying amount forchanges in fair value after its acquisition (or since the last reporting date if it was held at that time). Such changesare called unrealized holding gains and losses because they haven’t yet been realized through the sale of thesecurity. If a security is classified as available-for-sale, and an unrealized holding loss is viewed as giving rise toan other-than-temporary (OTT) impairment, how is it reported in the financial statements?
(Based on Appendix 12B) Reporting an investment at its fair value requires adjusting its carrying amount forchanges in fair value after its acquisition (or since the last reporting date if it was held at that time). Such changesare called unrealized holding gains and losses because they haven’t yet been realized through the sale of thesecurity. If a security is classified as available-for-sale, and an unrealized holding loss is viewed as giving rise toan other-than-temporary (OTT) impairment, how is it reported in the financial statements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Based on Appendix 12B) Reporting an investment at its fair value requires adjusting its carrying amount for
changes in fair value after its acquisition (or since the last reporting date if it was held at that time). Such changes
are called unrealized holding gains and losses because they haven’t yet been realized through the sale of the
security. If a security is classified as available-for-sale, and an unrealized holding loss is viewed as giving rise to
an other-than-temporary (OTT) impairment, how is it reported in the financial statements?
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