US CMA Part 1 · Chapter 1 · Question 21 of 23
Under US GAAP, how are unrealized holding gains on debt securities classified as available-for-sale reported?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) In other comprehensive income, accumulated in equity
Explanation
Available-for-sale debt securities are carried at fair value, with unrealized gains and losses (other than credit losses) reported in other comprehensive income. Trading securities report unrealized gains in net income, and held-to-maturity securities are carried at amortized cost.
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