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

Consider a situation involving determining right and wrong. Do you believe utilitarianism provides a more objective viewpoint than moral rights in this context? Why or why not? How about when comparing utilitarianism to principles of justice? Share your thoughts. Reflect on this statement: "Every principle of distributive justice, whether that of the egalitarian, the capitalist, the socialist, the libertarian, or Rawls, in the end is illegitimately advocating some type of equality." Do you agree or disagree with this assertion? Why might someone claim this, and how would you respond?

I need help checking my spreadsheet. Q: Assume that Temp Force’s dividend is expected to experience supernormal growth of 73%from Year 0 to Year 1, 47% from Year 1 to Year 2, 32% from Year 2 to Year 3 and 21% from year3 to year 4. After Year 4, dividends will grow at a constant rate of 2.75%. What is the stock’sintrinsic value under these conditions? What are the expected dividend yield and capital gainsyield during the first year? What are the expected dividend yield and capital gains yield duringthe fifth year (from Year 4 to Year 5)?

what are the five components of case study design? Please help explain with examples