Answer (D) is correct . Under U.S.?GAAP, trading securities are those held principally for sale in the near term. They are classified as current and consist of debt securities and equity securities with readily determinable fair values. Unrealized holding gains and losses on trading securities are reported in earnings. Hence, these securities are reported at fair value.
Answer (A) is incorrect because Cost is adjusted for changes in fair value.
Answer (B) is incorrect because An equity-based investment is adjusted for the investor’s share of the investee’s earnings, minus dividends received.
Answer (C) is incorrect because Lower of cost or market is applied by U.S.?GAAP to inventories, not trading securities.
|
