Fair Value Through Net Income

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  • #1691182
    Anonymous
    Inactive

    How is FVTNI different than FV?
    Reference: Financial Instruments-Equity Securities Valuation

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  • #1691200
    SchruteBeet
    Participant

    FVTNI is treated the same way as trading securities. Even though debt securities such as trading and AFS are both recognized at FV, the way their unrealized gains and losses are recognized is different. So FVTNI is just another way of saying equity securities are treated like trading securities in that they are recorded at fair value and any gains and losses (realized and unrealized) are recognized in earnings i.e. income statement.

    #1691285
    Anonymous
    Inactive

    ^^^Correct. To add to that, if you want to think about equity securities being taken out of the AFS treatment completely and their gains or losses never end up on OCI anymore. (Of course if you haven't studied it before January of this year, it's not helpful). LOL

    #1691447
    Anonymous
    Inactive

    Thank you both! Yes, I had taken it once before so learning the new stuff is throwing me off a bit. You guys were helpful 🙂

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