Which of the following is true regarding the investments of private colleges in securities with determinable fair values?
A) Investments are to be carried at the lower of cost or market.
B) Investments are to be carried at fair value or amortized cost, depending upon whether the investments are in equity or debt securities.
C) Investments are to be carried at fair value; unrealized gains and losses are to be reported in the Statement of Activities along with realized gains and losses.
D) None of the above.

Question

Quizplus · Accepted Answer

Private colleges are required to carry their investments in securities with determinable fair values at fair value, and to report unrealized gains and losses in the Statement of Activities along with realized gains and losses. This requirement is consistent with FASB ASC Topic 820, which provides guidance on fair value measurements and disclosures. Option A is incorrect because the lower of cost or market method is not allowed under GAAP for investments in securities with determinable fair values. Option B is incorrect because while the fair value or amortized cost method may be used for certain investments, it depends on the nature of the investment and not whether it is an equity or debt security.

Which of the Following Is True Regarding the Investments of Private