CPA Financial Accounting and Reporting (FAR) › Fair Value Method
A marketable debt security is moved from available-for-sale to held-to-maturity securities. At the transfer date, the security’s market value has fallen below its cost. What amount is used at the transfer date to record the security in the held-to-maturity portfolio?
Blue Corp purchased marketable securities in Purple Corp during Year 1. At the end of Year 1, the fair value of Purple Corp had dropped below cost. Blue Corp considered the decline in value to be temporary and the security is classified as available-for-sale. What should be the effect on Blue's financial statements in Year 1?
When a dividend is paid from a majority owned subsidiary to its parent company, what effect is demonstrated?
ABC Company acquired 40% of the outstanding non voting preferred stock of DEF Co. Which method of recording an investment should ABC use?
ABC Company received a cash dividend from a common stock investment. Should ABC report an increase in the investment account if it uses the fair value method or the equity method of accounting?
Which of the following is correct regarding the fair value method?