Energias de Portugal ranks among Europe's major electricity operators, as well as being one of Portugal's lagest business groups. The company is headquartered in Lisbon, Portugal. Assume that at December 31, 2012, Energias de Portugal had an available-for-sale portfolio with original cost of \(€ 135,948\) (in 000s). Its 2012 annual report disclosed the following for available-for-sale investments.

Required

a. What were total unrealized gains or losses in the available-for-sale portfolio at year end 2012?

b. How would pretax income be affected if Energias de Portugal had instead classified all of its available-for-sale investments as trading?

c. Explain how the impairment of the available-for-sale securities affected the balance sheet amount during 2012. Are impairment reversals permitted under U.S. GAAP?

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Thousands of Euros Banco Comercial Portugus REN - Rede Energticas Nacionais. Tejo Energia. Other.... Balance at 1 January 19,665 39,361 29,507 82,780 171,313 12,701 22,732 Change in Fair Value Acquisitions Disposals Impairment Reserve 10,031 (5,495) 5,452 - (1,126) (3,833) (1,126) (9,328) Other Balance at Variations 31 December 29,653 (953) (3,261) 1,451 (4,982) 2,689 (4,982) 38,408 26,246 86,991 181,298