An AFS debt security's market value is less than its original cost. The loss is reported in income when:

Question

Quizplus · Accepted Answer

For an Available-for-Sale (AFS) debt security, a loss is recognized in income when the investment's market value is below its cost, and it is more likely than not that the security will be sold before the market value recovers. This approach is consistent with the accounting principle that requires recognition of losses that are considered to be other-than-temporary.

An AFS Debt Security's Market Value Is Less Than Its