Question
16) Hulio Company has a credit balance in the balance Fair Value Adjustment (FVA) account that is associated with its Equity securities portfolio at December
16) Hulio Company has a credit balance in the balance Fair Value Adjustment (FVA) account that is associated with its Equity securities portfolio at December 31, 2025. Which of the following statements is true regarding Hulios 2025 financial statements?
A) Hulio will report an unrealized holding loss in comprehensive income and as a component of accumulation other comprehensive income in stockholders equity.
B) Hulio will report an unrealized holding gain in comprehensive income and as a component of accumulated other comprehensive income in stockholders equity.
C) The FVA account balance is added to the balance in the Equity Investment asset account to report the securities at fair value on the balance sheet. INCORRECT
D) The FVA account balance is subtracted from the equity Investment asset account to report the securities at fair value on the balance sheet.
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