F5

Question 1

three types of debt securities

Answer 1

trading, available for sale, or held to maturity

Question 2

trading securities

Answer 2

held as a current asset - reported at fair value

Question 3

available for sale securities

Answer 3

noncurrent - reported at fair value

Question 4

held to maturity

Answer 4

reported at amortized cost

Question 5

changes in fair value for trading or available for sale securities result in

Answer 5

unrealized holding gains or losses

Question 6

when to recognize realized gains and losses

Answer 6

when available for sale security is deemed impaired or debt security is sold

Question 7

how to treat unrealized gains and losses on HTM securities

Answer 7

they are not recognized in the financial statements

Question 8

HTM credit loss calculation

Answer 8

amortized cost - PV at year end

Question 9

AFS credit loss calculation

Answer 9

amortized cost - PV at year end (*but cannot exceed difference in amortized cost and FV at year end)

Question 10

where do unrealized g/l for AFS securities go

Answer 10

in OCI until realized, not on income statement

Question 11

value of trading securities at year end

Answer 11

fair value + additional purchased - unrealized losses

Question 12

when transferring AFS to trading, when should unreal holding G/L be recognized

Answer 12

immediately in earnings

Question 13

trading securities

Answer 13

recorded at fair value and with unreal gains and losses included in earnings