Mirvish Limited invests in short term investments. The following information is available about its investments at December 31, 2012: If Mirvish accounts for these as available-for-sale investments, what entry is necessary for fiscal 2012?

Question

Mirvish Limited invests in short term investments. The following information is available about its investments at December 31, 2012:  If Mirvish accounts for these as available-for-sale investments, what entry is necessary for fiscal 2012?

Quizplus · Accepted Answer

If Mirvish accounts for these investments as available-for-sale, any unrealized gains or losses should be recognized in OCI (other comprehensive income) until the investments are sold. Therefore, the entry necessary for fiscal 2012 would be a loss of $8,000 to OCI.

Mirvish Limited Invests in Short Term Investments