Trading Debt Investments: Trading debt investments are the investments in debt securities where the investors wish to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets. Fair value: Fair value refers to the price of the securities in the market, if the company has decided to sell the securities. Unrealized-gain or Unrealized-loss: Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss. Where the unrealized holding gain or loss on the trading debt investment is reported on the financial statements.

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Chapter 10, Problem 10RQ

To determine

Trading Debt Investments:

Trading debt investments are the investments in debt securities where the investors wish to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

Fair value:

Fair value refers to the price of the securities in the market, if the company has decided to sell the securities.

Unrealized-gain or Unrealized-loss:

Unrealized-holding gain or loss occurs when the investor company record the investments at its fair value, in its financial statements, without disposing (selling) them. When the cost of the investment is lesser than the fair value of the investment, then it is unrealized-gain. On the contrary, when the cost of the investment is greater than the fair value of the investment, then it is unrealized-loss.

Where the unrealized holding gain or loss on the trading debt investment is reported on the financial statements.

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