Asked by Antonio DjToniko on Jun 06, 2024
Verified
Available-for-sale debt securities are:
A) Recorded at cost and remain at cost over the life of the investment.
B) Reported at historical cost,adjusted for the amortized amount of any difference between cost and maturity value.
C) Reported at fair value on the balance sheet.
D) Intended to be held to maturity.
E) Always classified as Long-Term Investments.
Available-for-Sale Debt Securities
Debt securities not classified as held-to-maturity or trading securities, and are thus recorded at fair value with changes reflected in other comprehensive income.
Historical Cost
The original monetary value of an asset, reflecting its cost at the time of acquisition, not adjusted for inflation or changes in market value.
Amortized Amount
The portion of a loan or intangible asset's cost that has been allocated as an expense over a specific period.
- Describe and differentiate between various types of investments (held-to-maturity, available-for-sale, trading securities).
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
C
Explanation :
Available-for-sale debt securities are reported at fair value on the balance sheet. While unrealized gains and losses are recorded in other comprehensive income until realized.
Learning Objectives
- Describe and differentiate between various types of investments (held-to-maturity, available-for-sale, trading securities).