Cisco System, Inc., the leading Internet protocol- based networking equipment company, has significant holdings of investment securities. Use the financial
1. What is the composition of investments in the firm€™s portfolio of held- to- maturity, trading, and available-for- sale securities in fiscal 2013 and 2012? What percentage of total asset do its investments compose? Comment on changes in the composition and percentage of investments to total assets from year to year. Use fair value.
2. Which investment securities did Cisco report at fair value in fiscal 2013 and 2012? What is the difference between fair value and cost?
3. Determine the effect of changes in fair value on net income and other comprehensive income in fiscal 2013, 2012, and 2011. If unrealized gains and losses on available- for- sale securities were reported in net income rather than other comprehensive income, what would be the effect on net income in fiscal 2013, 2012, and 2011?
4. For its investment securities, determine the types and amount of investments in each level in the hierarchy in fiscal 2013.
5. Discuss the valuation methods used and comment on any assumptions and estimates used in valuation.
6. The majority of Cisco€™s investment securities are classified as available- for- sale. Why is Cisco concerned about the potential harm to earnings when changes in the fair values of these securities are reported in other comprehensive earnings?
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Question Posted: November 24, 2015 05:27:14