An OTT impairment for a debt investment is recognized in net income if fair value declines below the investment's cost and:
A) The company has incurred noncredit losses.
B) The company does not have the intent and ability to hold the investment until fair value recovers.
C) The company lacks intent to hold the investment until fair value recovers.
D) The company has incurred credit losses.

Question

Quizplus · Accepted Answer

According to ASC 320-10-35-34, an OTT impairment for a debt investment is recognized in net income if fair value declines below the investment's cost and the company does not have the intent and ability to hold the investment until fair value recovers. The other options (A, C, and D) do not apply as noncredit losses, intent to hold the investment, and credit losses are not relevant factors in determining whether an investment should be impaired.

An OTT Impairment for a Debt Investment Is Recognized in Net