Asked by Brayan Checo Rosario on Jul 16, 2024
Verified
Explain how available-for-sale securities are accounted for at and after acquisition and how they are reported in financial statements.
Available-for-sale Securities
Financial assets that are not classified as held-to-maturity or trading securities, and can be sold in the market.
- Discern the distinctions among available-for-sale, held-to-maturity, and held-for-trading securities regarding their approach in accounting.
Verified Answer
LM
Lacey MunsonJul 18, 2024
Final Answer :
Available-for-sale securities are recorded at cost when purchased. After acquisition they are reported on the balance sheet at their fair values with any unrealized holding gains or losses shown as part of other comprehensive income.
Learning Objectives
- Discern the distinctions among available-for-sale, held-to-maturity, and held-for-trading securities regarding their approach in accounting.
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