4. Yes sale and decides to exercise the fair value option with respect to that investment, the...
Question:
4. Yes sale ”and decides to exercise the fair value option with respect to that investment, the presentation of said investment in the Balance Sheet:
a. It will be at fair value and unrealized gains and losses are presented as other income integral.
b. It will be at fair value and unrealized gains and losses are presented in the Statement of Income and expenses.
c. It is unnecessary to apply the fair value option to investments classified as "available for sale ”because these investments are already being recorded at fair value.
d. Generally Accepted Accounting Principles (GAAP) do not allow the application of the fair value option to investments classified as "available for sale". the company has a bond investment originally classified as “available for 1.
5. Investments classified as “for trading” are presented in the Balance Sheet:
a. At their cost, because the company will retain them for a short time and both the changes in fair value and the amortization of the premium or discount will not be significant.
b. At fair value and unrealized gains and losses will be presented in the Income and Expenses Statement.
c. At fair value and unrealized gains and losses will be presented as other comprehensive income.
d. At the lower of cost or fair value.
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer