Question
A company can have passive interest (noninfluencial) investments, significant influential investments, or controlling interests. Passive interest investments can be trading, available-for-sale, or held-to-maturity securities. Required.
A company can have passive interest (noninfluencial) investments, significant influential investments, or controlling interests. Passive interest investments can be trading, available-for-sale, or held-to-maturity securities.
Required.
a. Describe the valuation basis at which each of these types of investments is reported on the balance sheet.
b. If the investment type is reported at fair value, indicate where any value fluctuation is reported (net income or comprehensive income).
c. What is the rationale for reporting held-to-maturity securities at cost? Does this rationale make economic sense?
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