What codification citation indicates how unrealized gains

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Reference no: EM133560896

Case: Imani West, CEO of West Industries, stopped by the company's finance department with a question. "I am considering having West Industries purchase bonds of Triton Corporation as an investment. Our auditor told me that ordinary changes in the market value of this investment may or may not affect our net income, depending how the investment is classified. I don't like going into audit meetings unprepared. I need to know what determines how a bond is treated so I can make sure this investment doesn't produce some income effect that surprises our shareholders. Can you give me the specific standards that apply?" Required: Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific nine-digit Codification citation (XXX-XX-XX-XX) that indicates the authoritative support in the Codification for each of the following aspects relevant to West's request. If a citation uses letters to indicate sub-paragraphs (e.g., XXX-XX-XX-05b), include the letter in the citation.

Question 1. What Codification citation indicates the criteria for determining whether a debt investment is classified as available-for-sale?

Question 2. What Codification citation indicates how unrealized gains or losses from changes in fair value affect net income when investments are classified as available-for-sale?

Reference no: EM133560896

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