Asked by Madeline Boutot on Jun 19, 2024
Verified
Which of the following valuations models reports unrealized gains and losses on the statement of income?
A) equity
B) fair value through profit and loss
C) cost
D) amortized cost
Fair Value
The estimated market price of an asset or liability in an orderly transaction between market participants at the measurement date.
Unrealized Gains
Increases in the value of an asset that have occurred but have not yet been sold or realized as cash.
- Comprehend the differences between various valuation models for investments, such as the cost, fair value, and equity methods.
Verified Answer
RM
Roberto MachadoJun 23, 2024
Final Answer :
B
Explanation :
The fair value through profit and loss (FVTPL) valuation model reports unrealized gains and losses on the statement of income. This approach is used for financial assets that are held for trading or designated at fair value through profit or loss upon initial recognition.
Learning Objectives
- Comprehend the differences between various valuation models for investments, such as the cost, fair value, and equity methods.