ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 14, Problem 14.2.1E
To determine
Introduction: Securities Act of 1993 which is passed in 1993 for security exchange works with the motive to secure the investors so that they can get financial and other important information related to securities issued in public sale and also to have a check on activities like fraud, misrepresentation, etc.
To choose: The correct answer.
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. The issuing of security goes through a number of processes. Once the SEC has
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For hedge accounting to be used, U.S. GAAP requires that these criteria must be satisfied, except:
O a. The effectiveness of eliminating a specific market risk is documented.
O b. A description of the hedging strategy is provided.
O c. The derivative is designated as a hedging instrument.
O d. A net gain results from hedging a specific risk.
According to AC Topic 320, 'Investments - Debt and Equity Securities', all of the following changes in circumstances may cause an entity to change its intent to hold a certain security to maturity without calling into question its intent to hold other debt securities to maturity in the future, EXCEPT for:
O a. Evidence of a significant deterioration in the issuer's creditworthiness
O b. Changes in market interest rates and related changes in the security's prepayment risk
Oc. A change in tax law that eliminates or reduces the tax-exempt status of interest on the debt security
O d. A major business combination or major disposition that necessitates the sale or transfer of held-to-maturity securities to maintain the entity's existing interest rate risk position or credit risk policy
Chapter 14 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 14 - Prob. 14.1QCh. 14 - Prob. 14.2QCh. 14 - Prob. 14.3QCh. 14 - Prob. 14.4QCh. 14 - Prob. 14.5QCh. 14 - Prob. 14.6QCh. 14 - Prob. 14.7QCh. 14 - Prob. 14.8QCh. 14 - Prob. 14.9QCh. 14 - Prob. 14.10Q
Ch. 14 - What type of items that specially involve the...Ch. 14 - Prob. 14.12QCh. 14 - Prob. 14.13QCh. 14 - What types of information must be disclosed in the...Ch. 14 - Prob. 14.15QCh. 14 - Prob. 14.1CCh. 14 - Prob. 14.7CCh. 14 - Prob. 14.8CCh. 14 - Prob. 14.1.1ECh. 14 - Prob. 14.1.2ECh. 14 - Organization Structure and Regulatory Authority of...Ch. 14 - Prob. 14.1.4ECh. 14 - Prob. 14.1.5ECh. 14 - Prob. 14.1.6ECh. 14 - Prob. 14.2.1ECh. 14 - Prob. 14.2.2ECh. 14 - Prob. 14.2.3ECh. 14 - Prob. 14.3.1ECh. 14 - Prob. 14.3.2ECh. 14 - Prob. 14.3.3ECh. 14 - Prob. 14.3.4ECh. 14 - Prob. 14.3.5ECh. 14 - Prob. 14.3.6ECh. 14 - Prob. 14.3.7ECh. 14 - Prob. 14.4.1ECh. 14 - Prob. 14.4.2ECh. 14 - Prob. 14.4.3ECh. 14 - Prob. 14.4.4ECh. 14 - Prob. 14.6.1ECh. 14 - Prob. 14.6.2ECh. 14 - Prob. 14.6.3ECh. 14 - Prob. 14.6.4ECh. 14 - Prob. 14.6.5ECh. 14 - Prob. 14.6.6E
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Similar questions
- A company is trying to determine whether a debt security should be classified as a trading security or an available-for-sale security. Does the Codification provide guidance on a specific time period that an investor intends to hold a security? Is there a defined cut-off for an intended holding period? Identify the relevant authoritative guidance. (Use the following ASC citation format: ASC 000-00-00-00. Make sure to include "ASC" in your citation.)arrow_forward2) The SEC attempts to protect investors who purchase newly issued securities by requiring issuers to provide relevant financial information to potential investors. The SEC does not provide an opinion on the actual value of the securities.Therefore, a reckless investor could pay too much for some shares and consequently lose a lot. Do you think the SEC should, as part of every new offering of stocks or bonds, give investors an opinion on the appropriate value of the securities being offered? Explain.arrow_forwardIn what ways do financial derivatives address specific risks and play a role in risk management? How does the CFA Institute: Code of Ethics and Standards of Professional Conduct apply to investments in this market?arrow_forward
- 1. how does marketl risk relate to the Washington Mutual case and how can it be mitigated 2. what control Strategy for Market Risk can be used in the Washinton Mutual case 3. what recommendations can Washinton Mutual use to assist with there market risk and interest rate riskarrow_forwardWhich of the following is NOT a function of an organised security exchange? Question 13 options: 1) Providing a centre for securities to be offered to potential investors for the first time. 2) Providing a marketplace for the demand and supply of securities. 3) Providing a venue for determining security prices, making it easier to float new securities. 4) Establishing security prices, making them to be widely available to investors.arrow_forwardWhat are some SEC regulations regarding sales of new securities?arrow_forward
- Securities exchanges create efficient markets that do all of the following EXCEPT control the supply and demand for securities through price. allocate funds to the most productive uses. allow the price to be determined by supply and demand of securities. ensure a market in which the price reflects the true value of the security.arrow_forwardDescribe the differences in the underwriting process for an Investment Bank between a “firm commitment” securities offering and a “best efforts” offering.arrow_forwardHow are derivatives valued on the balance sheet? How is the adjustment to fair value recorded differently for a cash flow hedge versus a fair value hedge? That is, how does the fair value adjustment of each type of hedge affect current period net income and the accounting equation? What are the three criteria that must be met for a derivative to be classified as a hedge? Once entities decide to buy or sell derivatives to hedge economic risks, they then need to decide whether they want to use hedge accounting; it is an election, not a requirement, even when the derivatives are for the economic purpose of hedging. This election is reminiscent of inventory accounting. Just like when a company selects an inventory method, a company is not required to select the accounting method (LIFO, FIFO, weighted average, specific unit) that most closely corresponds with the physical movement of inventory, although they are free to do so. If entities decide to elect hedge accounting, the following…arrow_forward
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