Question Details

[solution] » Fair Value Times Two Resources Discussion Participation Scoring

Brief item decscription

Step-by-step solution file

Item details:

Fair Value Times Two Resources Discussion Participation Scoring
More:Fair Value Times TwoResources

  • Discussion Participation Scoring Guide.

Addison Manufacturing holds a large portfolio of debt and equity securities as an investment. The fair value of the portfolio is greater than its original cost, even though some securities have decreased in value. Ted Abernathy, the financial vice president, and Donna Nottebart, the controller, are near year-end in the process of classifying, for the first time, this securities portfolio in accordance with FASB Statement No. 115. Abernathy wants to classify those securities that have increased in value during the period as trading securities in order to increase net income this year. He wants to classify all the securities that have decreased in value as:

  1. Available-for-sale (equity securities).
  2. Held-to-maturity (debt securities).

Nottebart disagrees. She wants to classify those securities that have decreased in value as trading securities and those that have increased in value as available-for-sale and held-to-maturity. She contends the company is reporting a good earnings year and that recognizing the losses helps to smooth income this year. As a result, the company will have built-in gains for future periods when the company may not be as profitable.

Consider the scenario to discuss which treatment you would choose for determining the fair value of the equity investments. Use factual information to justify your treatment choice.


About this question:

This question was answered on: Feb 21, 2020

PRICE: $24 (18.37 KB)

Buy this answer for only: $24

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now