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MAXImum [283]
3 years ago
9

Escanaba purchased five-year debt securities on 1/1/21, which it plans to hold until maturity. At 12/31/21, the market value is

2% lower than carrying value. How should Escanaba report the 2021 unrealized loss?
Business
1 answer:
Sliva [168]3 years ago
7 0

Answer:

Escanaba should report their investment as held to maturity securities, therefore, they must be reported as non-current assets (since they mature in more than 1 year). Generally HTM securities are reported at their amortized cost.

This means that any change in their market price (gains or losses) will not be reported in the balance sheet nor the income statement.

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