Imp. for Sec. Flashcards
1
Q
How are HTM bonds evaluated?
A
Collectively, based on credit risk.
2
Q
How are AFS bonds evaluated?
A
Individually, by each bond issue.
3
Q
What is the credit loss limit for HTM bonds?
A
Amortized cost.
4
Q
What is the credit loss limit for AFS bonds?
A
Difference between amortized cost and fair value.
5
Q
Are unrealized losses considered for HTM bonds?
A
No.
6
Q
How are unrealized losses treated for AFS bonds?
A
Recognized as OCI if exceeding credit losses.
7
Q
Is there a specific rule for selling HTM bonds?
A
No.
8
Q
What happens when AFS bonds are likely to be sold?
A
Revalued to fair value, allowances reversed.
9
Q
Where are unrealized losses recorded for AFS bonds?
A
In OCI (Other Comprehensive Income).
10
Q
What does OCI stand for?
A
Other Comprehensive Income.
