Financial Statement Display of AFS Debt Securities A company buys debt securities at a par

value of $200,000, and designates them as AFS securities. At the end of the year, the company still holds

the securities, but their fair value has declined to $160,000.

Required

For each circumstance below, indicate where the loss, if any, is reported, and how the investment is dis

played on the companys yearend balance sheet.

a. The company intends to sell the securities before the loss in value is recovered.

b. The company does not intend to sell the securities before the loss in value is recovered, and

1. The loss is determined to be entirely an expected credit loss.

2. The loss is $35,000 creditrelated and $5,000 marketrelated