Including Unrealized Holding Gains for Trading Securities in

1. Unrealized holding gains for trading securities should be included in earnings. . "Unrealized holding gains and losses for trading securities shall be included in earnings." Trading securities should be measured subsequently at fair value in the financial position statements. der the equity method, the investor accounts for its share of the earnings or losses of the investee in the periods they are reported by the investee in its financial statements. 323-10-05-4 - "The equity method of accounting closely meets the objectives of accrual accounting because the investor recognized its share of the earnings and losses of the investee in the periods in which they are reflected in the accounts of the investee." The equity method gives investors the ability to reflect the underlying nature of their investment. The equity method allows for appropriate means of recognizing increases or decreases measured by GAAP. 3. Transfers of securities between categories are accounted for at fair value. 320—10—35—10 , "The transfer of a security between categories of investments shall be accounted for at fair value," Security transferred from the trading category: holding gain or loss at the date of transfer has already been recognized in earnings and should not be reversed. Security transferred into the trading category: portion of unrealized holding gain or loss at the date of transfer that has not been recognized already should be recognized in earnings immediately. Debt security transferred into the available-for-sale category from the held-to-maturity category: unrealized holding gains or loss at the date of tr nsfer should be reported in "other comprehensive income." Debt security transferred into the held»to-maturity category from the available-for-sale category: unrealized holding gain or loss at date of transfer should continue to be reported as a separated component of shareholders' equity. like accumulated other comprehensive income, but should be amortized over the remaining life of the security. 4. Disclosures for available~for~sale securities should include total losses for securities that have net losses included in accumulated other comprehensive income. 320-10-50-2 - Securites classified as available for sale should disclose the following by major security type as of the date for which a financial position statement is presented: amortized cost basis. total gains and losses for securities with net gains or losses in accumulated other comprehensive income. and information about the contractual maturities of the securities. 5. Describes examples of circumstances under which investment in debt is available to be sold and therefore should not be classified as held-to»maturity. 32071072574 - "An entity shall not classify a debt security as heldeto'maturity if the entity has the intent to hold the security for only an indefinite period." Should not be classified as heldrtdmatul y if any of the following happen: changes in market interest rates and related changes in the security's repayment risk. needs for liquidity. changes in the availability of the yield on alternative investments, changes in funding sources and terms, changes in foreign currency risk. Reference: FASB Accounting Standards Codificationiii. (n.d.). Retrieved October 24, 2022, from https:rl/asc.fasb.org/Home