If the fair value of stock received by a private-purpose trust fund differs from the par value of the stock,the premium or discount should be amortized over the remaining life of the stock.

Question

Quizplus · Accepted Answer

Stock has no maturity date and its par value, if any, is only a nominal amount; not the amount the trustees ever expect to receive. As such there is no premium or discount to amortize. At any rate, there is no premium or discount under fair value accounting, even for debt securities.

If the Fair Value of Stock Received by a Private-Purpose