Question
For each debt investment in the table below, compute the impairment loss, if any, and determine whether the loss is reported in net income or
For each debt investment in the table below, compute the impairment loss, if any, and determine whether the loss is reported in net income or other comprehensive income.
|
| Present |
| Loss Reported in |
| ||
|
|
|
| Value of |
| Net Income (NI) or | |
|
| Carrying | Fair | Future | Impairment | Other Comprehensive | |
|
| Classification | Value | Value | Cash Flows | Loss | Income (OCI)? |
| a. | Held-to-Maturity | $20,000 | $7,000 | $7,400 |
|
|
| b. | Trading | 20,000 | 7,000 | 7,400 |
|
|
| c. | Available-for-Sale | 20,000 | 11,400 | 10,640 |
|
|
| d. | Available-for-Sale | 20,000 | 7,000 | 7,400 |
|
|
Complete the following table. The classifications are according to U.S. GAAP and the amounts are in thousands of U.S. dollars.
| Present |
| Loss Reported in |
| |||||||||||||||
|
|
|
| Value of | Impairment | Net Income (NI) or |
| ||||||||||||
|
| Carrying | Fair | Future | Loss | Impairment | Other Comprehensive | ||||||||||||
|
| Classification | Value | Value | Cash Flows | Exists? | Loss | Income (OCI)? | |||||||||||
| a. | Held-to-Maturity | $20,000 | $7,000 | $7,400 |
|
|
| loss reported in NI | ||||||||||
|
|
|
|
|
| loss reported in OCI | |||||||||||||
| b. | Trading | 20,000 | 7,000 | 7,400 |
|
|
| loss reported in NI | ||||||||||
|
|
|
|
|
| loss reported in OCI | |||||||||||||
| c. | Available-for-Sale | 20,000 | 11,400 | 10,640 |
|
|
| loss reported in NI | ||||||||||
|
|
|
|
|
| loss reported in OCI | |||||||||||||
| d. | Available-for-Sale | 20,000 | 7,000 | 7,400 |
|
|
| loss reported in NI | ||||||||||
|
|
|
|
|
| loss reported in OCI | |||||||||||||
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Integrated Audit Practice Case
Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens
7th Edition
0912503688, 978-0912503684
