How can you provide a report that includes your recommendations on reporting, and how will be the effects on carrying value and earnings in each of the following situations below?

1. The client has an equity security that has declined in value (i.e., the market value is less than what he or she paid for it [cost]). It is currently classified asavailable-for-sale, but the client would like to change its reporting to atrading security.
2. The client has a combination of investments in a portfolio that are long-term investments. The portfolio has increased in value overall, but there is one stock whose value has fallen by more than 60%. The client thinks that this decline in value is permanent.
3. The client has a portfolio of trading securities that has dropped 20% in value. He or she has another portfolio that is available-for-sale, and its fair value has increased by 40%.