Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 12, Problem 12.4Q
When a debt investment is acquired to be held for an unspecified period of time as opposed to being held to maturity, it is reported at the fair value of the investment securities on the reporting date. Why?
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When a debt investment is acquired to be held for an unspecified period of time as opposed to being held to maturity, it is reported at the fair value of the investment securities on the reporting date. Why?
In investment in debt securities accounted for at fair value through other comprehensive income, the difference between the fair value and the accumulated unrealized gain or loss - OCI presented in the statement of financial position would normally equal to: *
A. The unrealized gain or loss - OCI presented as part of other comprehensive income
B. The amortized cost of the debt securities
C. The interest income for the period
D. The fair value of the debt securities in the previous period
When an investment is acquired to be held for an unspecified period of time as opposed to being held to maturity, it is reported at the fair value of the investment securities on the reporting date. Why?
Chapter 12 Solutions
Intermediate Accounting, 10 Ed
Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5QCh. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Under IFRS No. 9, which reporting categories are...Ch. 12 - Prob. 12.12QCh. 12 - Do U.S. GAAP and IFRS differ in the amount of...Ch. 12 - Under what circumstances is the equity method used...Ch. 12 - The equity method has been referred to as a...Ch. 12 - In the application of the equity method, how...Ch. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - How does IFRS differ from U.S. GAAP with respect...Ch. 12 - What is the effect of a company electing the fair...Ch. 12 - Define a financial instrument. Provide three...Ch. 12 - Some financial instruments are called derivatives....Ch. 12 - (Based on Appendix 12A) Northwest Carburetor...Ch. 12 - Prob. 12.25QCh. 12 - Prob. 12.26QCh. 12 - (Based on Appendix 12B) Reporting an investment at...Ch. 12 - Prob. 12.28QCh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.20BECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.15PCh. 12 - Prob. 12.2DMPCh. 12 - Prob. 12.4DMPCh. 12 - Continuing Cases Target Case LO12-4, LO12-6...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Indicate how unrealized holding gains and losses shouldbe reported for debt investments classified as trading,available-for-sale, and held-to-maturity.arrow_forwardAn unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.arrow_forwardWhen convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be ________. treated as a prior period adjustment treated as an adjustment of additional paid-in-capital reflected currently in incomearrow_forward
- What adjustment must be made at the end of the period for trading debt investments and available-for-sale debt investments?arrow_forwardWhich of the following statements is correct in regard to trading bond investment? a. Trading bond investments are held with the intention of selling them in a short period of time b. Unralized gains and losses are reported as part of income c. both are correct d. both are incorrectarrow_forwardHow is the premium or discount on debt investments at fair value through profit or loss accounted for? As part of amortized cost and amortized over the life of the bonds. As part of the cost until the disposal of the asset. As expense or revenue in the period the bonds are purchased. All of the above.arrow_forward
- On a balance sheet, what valuation must be reported for short-term debt investments in trading securities?arrow_forwardGAAP requires investments in bonds classified as trading securities to be reported at their: A. fair value. B. net realizable value. C. maturity value. D. historical cost.arrow_forwardWhere are debt investments classed as trading securities, available-for-sale securities, and held-to-maturity securities recorded on the asset side of the balance sheet? Explainarrow_forward
- The fair value option allows a company to report most financial instruments at fair value at each reporting date. record the unrealized gains and losses related to changes in the fair value of available-for-sale debt securities in net income. account for held-to-maturity securities at amortized cost. all of these choices are true of the fair value option.arrow_forwardInvestment in debt instruments classified asFA@FVTOCI recognizes which of the following in OCI? a) Changes in fair valueb) Impairment gains and lossesc) Interest calculated using the effective interestmethod.d) All of the above.arrow_forwardWhat is the effective interest rate of a bond or other debt instrument measured at amortized cost? Select the correct response: The interest rate currently charged by the entity or by others for similar debt instruments (i.e., similar remaining maturity, cash flow pattern, currency, credit risk, collateral, and interest basis). The interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the debt instrument or, when appropriate, a shorter period to the net carrying amount of the instrument. The basic, risk-free interest rate that is derived from observable government bond prices The stated coupon rate of the debt instrument.arrow_forward
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