Presented below are three unrelated situations involving equity investments.

Situation 1
A debt investment portfolio, whose fair value is currently less than cost, is classified as trading but is to be reclassified as held-for-collection.

Situation 2
A debt investment portfolio with an aggregate fair value in excess of cost includes one particular debt investment whose fair value has declined to less than one-half of the original cost. The decline in value is considered to be permanent.

Situation 3
The portfolio of trading equity investments has a cost in excess of fair value of $13,500. The portfolio of non-trading equity investments has a fair value in excess of cost of $28,600.

What is the effect upon carrying value and earnings for each of the situations above?

  • CreatedJune 17, 2013
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