In short
Trading securities are debt securities bought and held mainly to sell in the near term. They are carried at fair value, with unrealized gains and losses in net income.
Key takeaways
- They are usually current assets.
- Cash flows from buying and selling them are classified by their nature, typically operating.
- Equity securities without significant influence are also measured at fair value through net income, without a trading label.
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 and losses on debt securities classified as trading are reported in: