Question

Keys, Inc., compared the cost of its marketable securities to their market value at the end of 2010. This comparison follows:
Management would like to classify these securities as available- for- sale and, therefore, report the unrealized loss on the statement of shareholders’ equity rather than the income statement. How should the auditor decide if the securities are “trading” or “available- for- sale”? What are the advantages and disadvantages of reporting unrealized losses on the statement of shareholders’ equity rather than the in-come statement? How will the various stakeholders be affected by this decision?


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  • CreatedMarch 25, 2015
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