Which of the following is true of trading debt investments?

Question

Quizplus · Accepted Answer

Debt investments must be adjusted to fair value at each reporting period and any changes in value reported in the financial statements. This is required under the accounting standard known as ASC 820, which governs fair value measurement and disclosures. Therefore, option C is correct as it reflects this requirement. Option A is incorrect as there is no specific holding period requirement for trading debt investments. Option B is also incorrect as the classification of a trading debt investment as long-term or short-term depends on the intent of the investor, not the nature of the investment itself. Lastly, option D is incorrect as debt investments can be recorded at fair value or amortized cost, depending on the investor's accounting policy.

Which of the Following Is True of Trading Debt Investments