The valuation of available-for-sale debt securities is similar to the procedures followed for trading debt securities, except that changes in fair value are not recognized in current income.

Question

Quizplus · Accepted Answer

The statement is correct. Changes in fair value of available-for-sale debt securities are not recognized in current income but instead reported as other comprehensive income until the securities are sold or impaired.

The Valuation of Available-For-Sale Debt Securities Is Similar to the Procedures