Asked Jan 17, 2020

The market value of Helig Forestry and Mining Corporation common stock dropped 6 1∕8 points when the federal government passed new legislation banning one of the company’s primary techniques for extracting ore. Harris Corporation owns shares of Helig and classifies its investment as securities available-for-sale. How should the decline in market value be handled by Harris?


Expert Answer

Step 1

Available-for-sale (AFS) securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.


Unrealized holding gains and losses: These are gains and losses which are unrealized and ar...

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