Asked by Jonathan Philley on Jun 20, 2024
Verified
A decline in the fair value of the available-for-sale debt securities portfolio reduces assets and net income.
Fair Value
An estimate of the market value of an asset or liability, based on current prices or valuations in an orderly transaction between market participants.
- Discern the accounting strategy for managing unrealized holding gains and losses within multiple investment categories.
- Distinguish between realized and unrealized gains and losses and their impact on financial statements.
Verified Answer
MW
Morgan WittemanJun 23, 2024
Final Answer :
False
Explanation :
A decline in the fair value of available-for-sale debt securities reduces assets but does not affect net income; instead, it impacts other comprehensive income.
Learning Objectives
- Discern the accounting strategy for managing unrealized holding gains and losses within multiple investment categories.
- Distinguish between realized and unrealized gains and losses and their impact on financial statements.