What is Available-for-sale debt securities?
In short
Available-for-sale debt securities are debt investments not classified as trading or held-to-maturity. They are carried at fair value, with unrealized gains and losses reported in other comprehensive income.
Key takeaways
- Credit losses on them go to net income through an allowance; other declines go to other comprehensive income.
- When sold, the accumulated gain or loss is reclassified from other comprehensive income into net income.
- Trading debt securities are at fair value through net income; held-to-maturity securities are at amortized cost.
Where it's tested
FAR: Investments (Debt & Equity Securities) — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Unrealized holding gains on debt securities classified as available-for-sale are reported in: