FAR — Quick Sheet
Investments (Debt & Equity Securities)
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One-minute revision
- Trading: FV, unrealized G/L → net income
- AFS: FV, unrealized G/L → OCI
- HTM: amortized cost (debt only; needs intent + ability to hold)
- Most equity securities: FV through net income (post ASU 2016-01)
- Equity method (20–50% ownership): Investment ↑ by share of NI, ↓ by share of losses and dividends. Dividends ≠ income.
COMMON TRAP: Equity-method dividends reduce the investment balance — they are not recorded as investment income.