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A security in a portfolio of available-for-sale securities is transferred to the trading category. The security...

A security in a portfolio of available-for-sale securities is transferred to the trading category. The security should be transferred between the corresponding portfolios at:

  1. book value at date of transfer if higher than the fair value at date of transfer

  2. fair value at date of transfer, regardless of its cost

  3. cost, regardless of the fair value at date of transfer

  4. lower of its cost or fair value at date of transfer

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Answer #1

Option B is the answer

The security has to be transferred between the corresponding portfolios at the fair value on the transfer date
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