Held-to-maturity security: The debt securities which are held by the investor with an intent to hold the investment till its maturity, are referred to as held-to-maturity securities.
Trading securities: These are short-term investments in debt and equity securities with an intention of trading and earning profits due to changes in market prices.
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.
To indicate: The information pertaining to the investments to be disclosed in the financial statements
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LooseLeaf Intermediate Accounting w/ Annual Report; Connect Access Card
- On which financial statement are current liabilities reported?arrow_forwardWhat are the different risks associated in the accounting of investments?arrow_forwardDescribe how short-term investments are reported in the balance sheet and account fortransactions involving marketable securities.arrow_forward
- For investments in equity securities, which will result in recording income based on the income of the investee? Select one: a. Held-to-maturity classification b. Trading classification O C. Available-for-sale classification O d. Equity method of accountingarrow_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_forwardIndicate where each of the following items is reported on financial statements. Choose from the followingcategories: (a) current assets, (b) long-term investments, (c) current liabilities, (d) long-term liabilities,(e) other revenues and gains, ( f ) other expenses and losses, and (g) equity. Unrealized gain on available-for-sale securitiesarrow_forward
- compare financial assets and marketable investmentsarrow_forwardWhich of the following is not a category of financial assets under GAM? Group of answer choices A.Held to maturity investments B.Available for sale financial assets C.Financial asset at fair value through other comprehensive income D.Loans and receivablearrow_forwardwhat reporting categories are used to account for debt investments?arrow_forward
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