Repeat E16-21 assuming that Gretta measures the debt security at fair value through OCI. Assume for simplicity that the carrying value is not reduced by amortization during 2021; thus, the carrying value on December 31, 2021, is $8,000 (accounting for the prior year write-down). Gretta determines that there has not been a significant increase in credit risk in 2020 and 2021. In 2020, Gretta determines the probability of default is 1% over the next 12 months and 3% over the life of the investment. In 2021, Gretta determines that the probability of default is 0.75% over the next 12 months and 2% over the lifetime of the investment.

Data from Exercises 21

Gretta Company purchased a debt investment on June 15, 2020, and classified it as available for sale. On December 31, 2020, the investment had a carrying value of $8,500 and a fair value of $8,000. On that date, the present value of the future cash flows from the debt investment is $8,100. On December 31, 2021, the carrying value, fair value, and present value of the investment are $7,900, $7,800, and $7,800, respectively. Gretta does not anticipate selling the investment before it recovers. What is the amount of the impairment loss/gain in 2020 and 2021? Where does Gretta report the impairment loss/gain?