Which of the following is a true statement about the accounting for trading investments under IFRS?
A) The investment is initially recorded at fair value.
B) Gains and losses are recorded in OCI when the market value is different from the purchase price.
C) The accounting for trading investments is the same as the accounting for short-term investments in debt instruments purchased to earn interest.
D) The investment is initially recorded at face value.

Question

Quizplus · Accepted Answer

Trading investments under IFRS are initially recorded at fair value, and subsequent gains and losses are recognized in profit or loss, not in OCI. This differentiates them from other types of investments, such as those accounted for under the available-for-sale category, where unrealized gains and losses would be recorded in OCI.

Which of the Following Is a True Statement About the Accounting