Long Term Non Trading Securities

1168 Words Feb 21st, 2016 5 Pages
Trading securities are securities that are held by an organization that intends to buy and sell for profit in the short-term (Balance Sheet, 2015). These securities are usually reported at their fair market value and any gains or losses are included in the income statement. They are also classified as either unrealized holding losses or gains on the statement of operations and this classification affects the operating income. The counter account on the balance sheet shows allowance for all adjusted short-term investments in the market (“Choosing the Appropriate Accounting”, n.d.).
Long term non-trading securities, on the other hand, are securities held by an organization that intends to buy and hold these securities until a fixed future
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Once the decision has been made on the classification the organization will evaluate both the qualitative and quantitative information including the offering prices, market conditions, price multiples, trends of earnings and other key measures.
When evaluating and reporting equity securities any decline in the security, that is deemed to be other than temporary, the organization will recognize it as an impairment loss in that reporting period, and the results will be a decline in income. An organization will record debt securities in the consolidated statement of operations, or income statement, only if the drop of the credit rating element is not temporary unless, the organization wishes to sell the security or required to do so (Luecke, & Meeting, 2002).
The stakeholders affected by both Faust and McCabe decisions are: Bartlett Financial Services employees, shareholders, managers, creditors and also the customers. The primary goal and objective for most organizations is to make a profit. When an organization generates profits in a business environment, it is a positive indicator that the organization is producing services and goods that meet the needs of the customers and also at a fair price.
Developing a strong clientele base and having a competitive advantage over other firms in

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