Wickum Corporation reports under IFRS (according to IAS No. 39), and recognized a $500,000 other-thantemporary impairment of an HTM debt investment in Right Corporation. Subsequently, the fair value of Wickum’s investment in Right increased by $300,000. How would Wickum account for that increase in fair value?

Wickum Corporation reports under IFRS (according to IAS No. 39), and recognized a $500,000 other-thantemporary impairment of an HTM debt investment in Right Corporation. Subsequently, the fair value of Wickum’s investment in Right increased by $300,000. How would Wickum account for that increase in fair value?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 24P

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Wickum Corporation reports under IFRS, and recognized a $500,000 other-than-temporary impairment of anHTM debt investment in Right Corporation. Subsequently, the fair value of Wickum’s investment in Rightincreased by $300,000. How would Wickum account for that increase in fair value?
Maatex Inc., an accrual-basis taxpayer, transferred an operating division to a newly incorporated subsidiary, Taylor Inc., in exchange for 100% of Taylor’s newly issued common stock. The division’s business assets were worth $900,000 and had a tax basis of $440,000. The division also had $82,000 of accounts payable which were assumed by Taylor Inc. as part of the incorporation transaction. Required Should Maatex Inc. recognize any of its $460,000 realized gain on the exchange of property for stock and debt relief? How would your answers to these questions change if the accounts payable assumed by Taylor totaled $500,000 rather than only $82,000?
Wickum Corporation reports under IFRS, and recognized a $500,000 impairment of an HTM debt investment in Right Corporation. Subsequently, the credit loss for Wickum’s investment decreased by $300,000. How would Wickum account for that change?
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