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Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778 Exercise 58
Fair Value Adjustment
Apple Inc. accumulates large amounts of excess cash throughout the year. It typically invests these funds in marketable securities until they are needed. The company's most recent financial statements revealed a nearly $160 million unrealized gain on short-term investments. Footnotes to the financial statements disclosed that Apple Inc. reports its short-term investments at fair value.
a. Explain the meaning of the company's unrealized gain on short-term investments.
b. How does the unrealized gain impact the company's financial statements?
c. Is the unrealized gain included in the computation of the company's taxable income? Explain.
d. Evaluate fair value accounting from the perspective of the company's creditors.
Apple Inc. accumulates large amounts of excess cash throughout the year. It typically invests these funds in marketable securities until they are needed. The company's most recent financial statements revealed a nearly $160 million unrealized gain on short-term investments. Footnotes to the financial statements disclosed that Apple Inc. reports its short-term investments at fair value.
a. Explain the meaning of the company's unrealized gain on short-term investments.
b. How does the unrealized gain impact the company's financial statements?
c. Is the unrealized gain included in the computation of the company's taxable income? Explain.
d. Evaluate fair value accounting from the perspective of the company's creditors.
Explanation
Verified
Verified
a)
Unrealized gain on investments means ...
Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
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