[Anonymous]

Why does Wiley have to make things so complicated??????? It’s good for some things, but I seem to be struggling particularly in the area of Investments and my exam is less than a week away!

Is there anyone that can give me a brief summary of what Wiley’s rules are for investments?? I just don’t understand the whole “FV option elected” and how that affects Trading, AFS,and HTM securities…or how the election affects how equity method securities are measured at the end of the year.

This is just so confusing… : /

With Becker it was simple… Trading and AFS are measured at FV and HTM are measured at amortized cost Unrealized G/L are recognized on the I/S for Trading and OCI for AFS…Becker never made mention of the treatment of unrealized holding G/L for HTM and how they were to be reported (not that I can remember anyways)

Can anyone give me an easy-to-remember list of rules for this????

[Anonymous]

The only way you would have an unrealized holding gain/loss on an HTM security is if the fair value option IS elected. This is the only reason you would ever value HTM securities at FV and have any kind of unrealized gain/loss. I'm 90% sure that any kind of unrealized gain/loss for the fair value option flows through the income statement and not OCI.

As for the equity method fair value option, I'm not sure, someone else will have to help you there…

[Anonymous]

The only way you would have an unrealized holding gain/loss on an HTM security is if the fair value option IS elected. This is the only reason you would ever value HTM securities at FV and have any kind of unrealized gain/loss. I'm 90% sure that any kind of unrealized gain/loss for the fair value option flows through the income statement and not OCI.

As for the equity method fair value option, I'm not sure, someone else will have to help you there…

[Anonymous]

ok…I just spent the last hour rereading key points in the Wiley textbook and I think I get it now…

Trading securities:

– measured at FV

– unrealized G/L recorded on I/S

– realized G/L recorded on I/S

– affect of FV Option election: no change

Available for Sale securities:

– measured at FV

– unrealized G/L recorded in OCI

– realized G/L recorded on I/S

– affect of FV Option election: unrealized G/L are also recorded on I/S

Held to Maturity securities:

– recorded at amortized cost

– no unrealized G/L

– realized G/L recorded on I/S

– affect of FV Option election: remeasured to FV and unrealized G/L recorded on I/S

[Anonymous]

ok…I just spent the last hour rereading key points in the Wiley textbook and I think I get it now…

Trading securities:

– measured at FV

– unrealized G/L recorded on I/S

– realized G/L recorded on I/S

– affect of FV Option election: no change

Available for Sale securities:

– measured at FV

– unrealized G/L recorded in OCI

– realized G/L recorded on I/S

– affect of FV Option election: unrealized G/L are also recorded on I/S

Held to Maturity securities:

– recorded at amortized cost

– no unrealized G/L

– realized G/L recorded on I/S

– affect of FV Option election: remeasured to FV and unrealized G/L recorded on I/S

[Author]

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