Fisher Corporation has the following investments at September 30,2016:

What method of accounting will Fisher use to account for its investment in Brooke,if the intent of the business model is to hold the investment for the purpose of collecting contractual cash flows of principal and interest and profit from changes in value?

Question

Fisher Corporation has the following investments at September 30,2016:

What method of accounting will Fisher use to account for its investment in Brooke,if the intent of the business model is to hold the investment for the purpose of collecting contractual cash flows of principal and interest and profit from changes in value?

Quizplus · Accepted Answer

Fisher will use fair value through other comprehensive income method to account for its investment in Brooke if the intent of the business model is to hold the investment for the purpose of collecting contractual cash flows of principal and interest and profit from changes in value. This method allows for changes in fair value to be recorded in other comprehensive income, rather than the income statement, until the investment is sold, at which point the accumulated gains or losses will be recognized in net income.

Fisher Corporation Has the Following Investments at September 30,2016