When the cost of available-for-sale securities exceeds market value,the Allowance to Adjust Long-Term Investments to Market decreases Long-Term Investments on the balance sheet.

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When the cost of available-for-sale securities exceeds market value, it results in an unrealized loss that needs to be recognized in the financial statements. The Allowance to Adjust Long-Term Investments to Market is a contra account that is used to adjust the long-term investments to their fair market value. In this case, if the market value is lower than the cost, the allowance would decrease and be offset against the long-term investment balance, resulting in a lower net asset value for the firm.

When the Cost of Available-For-Sale Securities Exceeds Market Value,the Allowance