When market rates of interest rise after a fixed-rate security is purchased, the value of the now-below-market, fixed-interest payments declines, so the market value of the investment falls. If that drop in fair value is viewed as giving rise to another-than-temporary impairment, how would it be reflected in the investment account for a security classified as held-to-maturity?
Answer to relevant QuestionsReporting an investment at its fair value requires 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 ...S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2011, S&L purchased Coca-Cola common shares for $875,000 and sold the shares on January 3, 2012, for $880,000. At December ...Refer to the situation described in BE 12-9, but assume that Park Industries buys 50% of Wallis's common shares. Also assume that Park reports under International Financial Reporting Standards, and has elected the ...F&T Corporation is a confectionery wholesaler that frequently buys and sells securities to meet various investment objectives. The following selected transactions relate to FF&T's investment activities during the last two ...The investments of Harlon Enterprises included the following cost and fair value amounts:Harlon Enterprises sold its holdings of A Corporation shares on June 1, 2012, for $15 million. On September 12, it purchased the C ...
Post your question