Question
Investments are shown on the balance sheet dependent upon the time when they are to mature. Short term assets are any type of asset that
Investments are shown on the balance sheet dependent upon the time when they are to mature. Short term assets are any type of asset that is to be sold within the year. The remaining investments will be shown as a long term asset.
Any gains / losses on investments are shown on the income statement dependent upon their type of investment. I once worked at a not for profit agency and they had $100K loss one year on their investments. If the company were not likely to sell them, they would be classified as a long term investment and the gain/loss would not be shown in comprehensive income because the company likely will recover some of that loss - so why show the loss as a part of income when it likely will be reversed - or should I say hopefully will be reversed in the coming year when some of the loss is gained back as the market rises. This helps to stabilize the income of a company and not show "artificial gains/losses". Thoughts?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started