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Company A invests in a $55 million bond. It was purchased at par and is accounted for using amortized cost. At year-end Company A believes
Company A invests in a $55 million bond. It was purchased at par and is accounted for using amortized cost. At year-end Company A believes that there is a 5% the company will not collect 50% of the face value over its life. Company A uses the expected loss impairment model.
Discuss any financial reporting issues (should we recognize them or not recognize them) and provide any recommendations on how to handle this situation.
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