Question

Marin Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $52,000 Fair value 44,000 Expected credit losses 12,900 1) What is the amount of the credit loss that Flint should report on this available-for-sale security at December 31, 2020?

Answer 1

Answer:

Explanation:

Available for sale securities are required to be reported at fair value.

Hence the difference between amortized cost and fair value is required to be transferred to other comprehensive income.

The amount of credit loss that Marin should report on this available for sale security at 31-12-2020

= $52,000 - $44,000

= $8,000