Cogito

Recognition of Investment Securities

Posted in CFA by qmarks on April 19, 2010

Marketable investment securities are classified under three categories, Trading, Available for Sale and Held-to-Maturity. Profits and (losses) incurred are recognized differently depending on its classification. Briefly they are recognized as:

Trading Available for Sale Held to Maturity
Balance Sheet Fair Value Fair Value Amortized Cost
Income Statement Dividends
Interest
Realized gains/losses
Unrealized gains and losses
Dividends
Interest
Realized gains/losses
Interest
Realized Gains and losses
Comprehensive Income Unrealized Gains and Losses
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