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11 Cards in this Set
- Front
- Back
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Trading securities |
Current assets (debt and equity securities) bought and held principally to sell them in the near term. |
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Avaliable-for-Sale Securites |
Noncurrent (generally) assets (debt and equity securities) that are neither classified as trading or held to maturity. |
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Held-to-Maturity Securities |
Debt securities (bonds) only. Noncurrent assets a corporation has invested in with the positive intent and ability to hold until maturity. |
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Valuation of Trading and AFS Securities |
Both are reported at FV. Trading securities - unrealized g/Ls are included in earnings (I.S) AFS - unrealized g/Ls are include in OCI All realized g/Ls are recognized when security is sold and are recognized on I.S |
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Valuation of Held-to-Maturity Securities |
Valued at amortized cost |
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Reclassification from trading category |
Unrealized holding G/Ls already recognized in earnings and are not to be reversed. |
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Reclassification to Trading category |
Unrealized holding G/Ls to be recognized in earning immediately |
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Debt classified as HTM transferred to AFS |
Unrealized holding G/Ls to be reported in OCI |
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Debt classified as AFS transferred to HTM |
The unrealized holding G/Ls already reported in OCI are to be amortized over the remaining life of the security |
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Impairment of securities |
If a decline in FV is permanent, the cost basis is written down to FV as the new cost basis and the amount of the write down is a realized loss reported in earning (I.S) |
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Sale of a security |
Sale from any category results in a realized G/L to be reported on the I.S for the period. The valuation account and any unrealized G/L will have to be reversed |
