FVPL (held for trading securities), FVOCI (mandatory); and Amortized cost.
Trade date & Settlement Date Accounting
Problem 1
On December 29, 2021, XYZ Co. acquires 2,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. Ownership over the financial asset transfers to XYZ Co. on January 3, 2022. The fair values per unit on December 31, 2021 and January 3, 2022 are P1.75 and P1.50, respectively.
Requirements: Provide the
- FVPL (held for trading securities),
- FVOCI (mandatory); and
- Amortized cost.
Problem 2
On December 29, 2021, XYZ Co. sells 2,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. The investment has a carrying amount of P1,200. Ownership over the financial asset transfers to the buyer on January 3, 2022. The fair values per unit on December 31, 2021 and January 3, 2022 are P1.75 and P1.50, respectively.
Requirements: Provide the journal entries under the trade date accounting and the settlement date accounting assuming the financial asset sold is classified as subsequently measured at:
- FVPL (held for trading securities),
- FVOCI (mandatory); and
- Amortized cost.
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