The fair value method requires that companies classify equity securities at acquisition as held-to-maturity securities or available-for-sale securities.

Question

Quizplus · Accepted Answer

The fair value method is used for accounting for equity securities, and it does not require classification as held-to-maturity or available-for-sale securities. These classifications are relevant under the amortized cost method for debt securities, not equity.

The Fair Value Method Requires That Companies Classify Equity Securities