Asked by Blukey McDowall on Jun 25, 2024
Verified
When individual AFS securities are sold,the difference between the cost of the individual securities sold and the net proceeds (sale price less fees)is recorded as a gain or loss on sale of debt investments.
Individual AFS Securities
Available-for-Sale (AFS) securities are financial assets held by an organization that can be sold in the market, where "individual" refers to each specific security within the AFS category.
Net Proceeds
The amount of money received from a transaction after deducting all associated costs and expenses.
- Discern the effects of variations in fair value on the presentation of available-for-sale and trading securities in financial statements.
- Acquire proficiency in the specific accounting approaches for handling unrealized gains and losses on securities.
Verified Answer
MW
Maninder WarraichJun 27, 2024
Final Answer :
True
Explanation :
This is because the cost and net proceeds of individual AFS securities sold are used to calculate the realized gain or loss on the sale of debt investments.
Learning Objectives
- Discern the effects of variations in fair value on the presentation of available-for-sale and trading securities in financial statements.
- Acquire proficiency in the specific accounting approaches for handling unrealized gains and losses on securities.
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