On October 25, 2020, a company pays $35,000 for an investment in equity securities, with no significant influence. On December 31, 2020, the company's year-end, the stock as a market value of $36,000. The company sells the stock in 2021 for $32,000. How is the company's 2020 other comprehensive income affected by the above transactions in each year?

Question

Quizplus · Accepted Answer

Equity securities with no significant influence are typically measured at fair value through net income, not other comprehensive income (OCI). Therefore, there is no effect on OCI in either year.

On October 25, 2020, a Company Pays $35,000 for an Investment