Reporting an investment at its fair value means adjusting its carrying amount for changes in fair value after its acquisition (or since the last reporting date if it was held at that time). Such changes are called unrealized holding gains and losses because they haven't yet been realized through the sale of the security. If the security is classified as available-for-sale, how are unrealized holding gains and losses reported if they are not viewed as giving rise to another-than-temporary impairment?
Answer to relevant QuestionsWhat is “comprehensive income”? Its composition varies from company to company but may include which investment-related items that are not included in net income?Under what circumstances is the equity method used to account for an investment in stock?What is the effect of a company electing the fair value option with respect to an investment that otherwise would be accounted for using the equity method?S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2011, S&L purchased Coca-Cola common shares for $875,000 and sold the shares on January 3, 2012, for ...At the beginning of 2011, Pioneer Products' ownership interest in the common stock of LLB Co. increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance ...
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