[NinaSun]

Ace, Ltd. reports under IFRS. For the current fiscal year, Ace showed the following gains and losses related to its available for sale securities:

Stock A, unrealized gain of $5000

Stock B, foreign exchange gain of $1,500

Bond A, foreign exchange loss of $2,300

Bond B, unrealized loss of $450

The amount that Ace will report as other comprehensive income is:

a. $6,050

b. $4,550

c. $2,250

d. $6,500

The answer is “a”. The explanation says: under IFRS, unrealized gains and losses for all available for sale securities and foreign exchange gains and losses for available for sale equity securities are reported as other comprehensive income. Foreign exchange gains and losses on available for sale debt securities are reported on the income statement. This explanation is different than what I told on the class. For foreign exchange gain/loss there is no difference between GAAP and IFRS. At chapter 10 Tim told that under IFRS available for sale debt equity report at FV and unrealized gain/loss report at OCI. For all equity instrument unrealized report at income statement. Can any one give me a refer to Becker review material to justify the explanation? Thanks a lot!

AUD-74,75 11/2014
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