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Flashcards in Investments Deck (3):
2

How are trading securities recorded?

On the balance sheet at Fair Value, as current assets

Unrealized gains/losses are recorded on the Income Statement

If they are reclassified as held-to-maturity or available-for-sale, there is no effect upon transfer.

3

How are Available-For-Sale securities recorded?

On the balance sheet, at fair value as either current or non-current assets.

Unrealized gains/losses are included in OCI (Other Comprehensive Income)

If reclassified as held-to-maturity, unrealized G/L go to Stockholder's Equity

If reclassified as trading securities, unrealized G/L recognized in current period.

4

How are held-to-maturity securities recorded?

On the balance sheet at amortized cost as current or non-current assets.

Unrealized gains or losses are not applicable.

If reclassified as available-for-sale, unrealized G/L go to Stockholder's Equity

If reclassified as trading securities, unrealized G/L recognized in current period