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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Briefly describe how to determine and record any subsequent increases or decreases in the fair value of an investment in available-for-sale securities.

To determine

Explain the way in which the increase or decrease in the fair value of an investment in available-for-sale securities are determined and reported.

Explanation

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Available-for-sale securities: These are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

  • Investment in available-for-sale securities are reported in the balance sheet at their fair value...

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