Audit procedure is a method performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. Audit procedure performs different test of controls to avoid the risks. To discuss: The classification and valuation issues related to investment in debt and equity securities. The following issues of classification and valuation related to investment in debt and equity securities are: The debt and securities face the valuation issue when investing in held-for-trading securities. It is purchased at the fair value (at that time) and later unrealized gain or losses are reported for the difference in current market price and purchase price. Valuation may differ from individual to individual who is responsible for such valuation.Thus, the fair market value keeps on changing and there is no specific method to evaluate the change. The classification and valuation issue related to investment in debt and securities include the companies that hold the money till the time of maturity date which creates the classification issues. The classification and valuation issue related to investment is available for sale securities that are not evaluated as other securities. They are calculated on the fair value, with the unrealized losses and gains apart from the earnings and reported until it is realized.

Question

Want to see the full answer?

Answer 1

Question

Chapter 16, Problem 16.9RQ

To determine

Concept Introduction:

Audit procedure is a method performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. Audit procedure performs different test of controls to avoid the risks.

To discuss:The classification and valuation issues related to investment in debt and equity securities.

The following issues of classification and valuation related to investment in debt and equity securities are:

The debt and securities face the valuation issue when investing in held-for-trading securities. It is purchased at the fair value (at that time) and later unrealized gain or losses are reported for the difference in current market price and purchase price. Valuation may differ from individual to individual who is responsible for such valuation.Thus, the fair market value keeps on changing and there is no specific method to evaluate the change.

The classification and valuation issue related to investment in debt and securities include the companies that hold the money till the time of maturity date which creates the classification issues.

The classification and valuation issue related to investment is available for sale securities that are not evaluated as other securities. They are calculated on the fair value, with the unrealized losses and gains apart from the earnings and reported until it is realized.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Your company is planning to borrow $2.75 million on a 5-year, 16%, annual payment, fully amortized term loan. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Amortization Loan amount $2,750,000 Term in years 5 Annual coupon rate 16.00% Calculation of Loan Payment Formula Loan payment = #N/A Loan Amortization Schedule Year Beginning Balance Payment Interest Principal Ending Balance 1 2 3 4 5 Formulas Loan Amortization Schedule Year Beginning Balance Payment Interest Principal Ending Balance 1 #N/A #N/A #N/A #N/A #N/A 2 #N/A #N/A #N/A #N/A #N/A 3 #N/A…

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $45,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $180,000 saved, and he expects to earn 8% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Required annuity payments Retirement income today $45,000 Years to retirement 10 Years of retirement 25 Inflation rate 5.00%…

Don't used hand raiting