Mirvish Limited invests in short term investments. The following information is available about its investments at December 31, 2020: $$\begin{array} { | l | r | r | }
\hline & \text { Cost } & \text { Market } \
\hline \text { Investment 1 } & \$ 40,000 & \$ 36,000 \
\hline \text { Investment2 } & 30,000 & 26,000 \
\hline
\end{array}$$ If Mirvish accounts for these at fair value through OCI investments, what entry is necessary for fiscal 2020?

Question

Mirvish Limited invests in short term investments. The following information is available about its investments at December 31, 2020: $$\begin{array} { | l | r | r | } 
\hline & \text { Cost } & \text { Market } \
\hline \text { Investment 1 } & \$ 40,000 & \$ 36,000 \
\hline \text { Investment2 } & 30,000 & 26,000 \
\hline
\end{array}$$ If Mirvish accounts for these at fair value through OCI investments, what entry is necessary for fiscal 2020?

Quizplus · Accepted Answer

Fair value through OCI is a reporting option for certain investments, where unrealized gains and losses are reported in OCI rather than net income. Therefore, a loss of $8,000 should be reported in OCI.

Mirvish Limited Invests in Short Term Investments If Mirvish Accounts for These at Fair Value Through OCI