Question

information about academic integrity.

Please answer the following question(s):

1. Access the FASB's Codification Research System at the FASB website (www.fasb.org )

Required:

What is the specific eight-digit Codification citation (X X X-X X-X X-X) and category for each of the following items? Then provide a general explanation for each item.

1. Unrealized holding gains for trading securities should be included in earnings.

2. Under 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.

3. Transfers of securities between categories are accounted for at fair value.

4. Disclosures for available-for-sale securities should include total losses for securities that have net losses included in accumulated other comprehensive income.

5. Describes examples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity.

Answer 1

Specific eight-digit Codification citation (XXX-XX-XX-X) and category for each of the following items as per FASB Accounting Standards Codification is as follows:

Category - Assets - 32X Investments -

Items	Topic	Sub Topic	Section	Paragraph
1. Unrealized holding gains for trading securities should be included in earnings.	320	10	35	1
2. Under 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
3. Transfers of securities between categories are accounted for at fair value.	320	10	35	10
4. Dislosures 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
5. Describes examples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity.	320	10	25	4

Explanation-

Items	Explanation
1. Unrealized holding gains for trading securities should be included in earnings.	Investment in debt securities that are classified as Trading should be measured subsequently at fair value. When done so, the holding gains and losses for trading securities should be included in earnings.
2. Under 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.	For recognising any change in economic resources underlying the investments, equity method is most appropriate. It also meets the accrual basis of accounting by accounting share of investor in the earnings or losses of the investee in the periods they are reported by the investee in its financial statements
3. Transfers of securities between categories are accounted for at fair value.	At each reporting date, classification of an entity's investment in debt securities shoul be reassessed for its appropriateness. And when they are reclassified, it is done at fair value.
4. Dislosures for available-for-sale securities should include total losses for securities that have net losses included in accumulated other comprehensive income.	The disclosure requiremnets are for all interim and annual periods. For securities that classified as available-for-sale, disclosure of following by major security type as on the date of financial statement is required- 1) Amortized Cost basis 2) Aggregate fair value 3) Total losses for securities with net losses in accumulated other comprehensive income 4) Total gains for securities with net gains in accumulated other comprehensive income 5) Total other-than-temporary impairment that were recognized in other comprehensive income
5. Describes examples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity.	If entity anticipates that due to following circumstances security would be available to be sold, then it should not be classified as held-to-maturity: 1) Changes in market interest rates 2) Changes in foreign currency risk 3) Changes in funding sources and terms of funding 4) Changes in alternative investment yield and availability 5) Need for liquidity.