What factors should be considered in determining whether

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The Financial Accounting Standards Board issued accounting guidance to clarify accounting methods and procedures with respect to certain debt and all equity securities. An important part of the statement concerns the distinction between held-to-maturity, available-for-sale, and trading securities. Instructions

(a) Why does a company maintain an investment portfolio of held-to-maturity, available-for-sale, and trading securities?

(b) What factors should be considered in determining whether investments in securities should be classified as held-to-maturity, available-for-sale, and trading? How do these factors affect the accounting treatment for unrealized losses?

Reference no: EM13574239

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