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under CICA handbook section 3855, available for sale is valued on the basis of fair value and unrealized gain and losses are included in other comprehensive income. Held to maturity are valued at cost. But they are all subject to impairment test. Losses from impairment are charged to net income. Does SFAS 115 also require the impairment test as section 3855?
Answer: by specialday(Joyce)
Yes, under SFAS115 “Accounting for Certain Investments in Debt and Equity Securities”. companies have to periodically evaluate their investments (available-for-sale & held-to-maturity) for impairment due to declines in market value considered to be other than temporary.
Impairment of Securities
16. For individual securities classified as either available-for-sale or held-to-maturity, an enterprise
shall determine whether a decline in fair value below the amortized cost basis is other than temporary.
If the decline in fair value is judged to be other than temporary, the cost basis of the individual security shall be
written down to fair value as a new cost basis and the amount of the write-down shall be included in earnings (that is, accounted for as a realized loss).更多精彩文章及讨论，请光临枫下论坛 rolia.net
under CICA handbook section 3855, available for sale is valued on the basis of fair value and unrealized gain and losses are included in other comprehensive income. Held to maturity are valued at cost. But they are all subject to impairment test. Losses from impairment are charged to net income. Does SFAS 115 also require the impairment test as section 3855?
Answer: by specialday(Joyce)
Yes, under SFAS115 “Accounting for Certain Investments in Debt and Equity Securities”. companies have to periodically evaluate their investments (available-for-sale & held-to-maturity) for impairment due to declines in market value considered to be other than temporary.
Impairment of Securities
16. For individual securities classified as either available-for-sale or held-to-maturity, an enterprise
shall determine whether a decline in fair value below the amortized cost basis is other than temporary.
If the decline in fair value is judged to be other than temporary, the cost basis of the individual security shall be
written down to fair value as a new cost basis and the amount of the write-down shall be included in earnings (that is, accounted for as a realized loss).更多精彩文章及讨论，请光临枫下论坛 rolia.net