Chapter 15: ("Investments and International Operations") Flashcards
Trading securities
Balance sheetのどこに記録される?
Trading securities are debt and equity securities that the company intends to actively manage and trade for profit. Frequent purchases and sales are expected and are made to earn profits on short-term price changes. Trading securities are always reported as current assets.
unrealized gain (or loss)
Financial Statementのどこに表示される?
The unrealized gain (or loss) is reported in the Other Revenues and Gains (or Expenses and Losses) section on the income statement. Unrealized Gain (or Loss)—Income is a temporary account that is closed to Income Summary at the end of each period. Fair Value Adjustment— Trading is a permanent account, which adjusts the reported value of the trading securities port- folio from its prior period fair value to the current period fair value. The total cost of the trading securities portfolio is maintained in one account, and the fair value adjustment is recorded in a separate account.
Held-to-maturity (HTM) securities
Balance Sheetのどこに記録される?
Held-to-maturity (HTM) securities are debt securities a company intends and is able to hold until maturity. They are reported in current assets if their maturity dates are within one year or the operating cycle, whichever is longer. HTM securities are reported in long-term assets when the maturity dates extend beyond one year or the operating cycle, whichever is longer. All HTM securities are recorded at cost when purchased, and interest revenue is recorded when earned.
Available-for-sale (AFS) securities
Balance Sheetのどこに記録される?
Available-for-sale (AFS) securities are debt and equity securities not classified as trading or held-to-maturity securities. AFS securities are purchased to yield interest, dividends, or in- creases in fair value. They are not actively managed like trading securities. If the intent is to sell AFS securities within the longer of one year or operating cycle, they are classified as short-term investments. Otherwise, they are classified as long-term investments.