In U.S.GAAP, which of the following accurately describes the effects of transactions involving investments on the statement of cash flows using the fair value method for securities available for sale and cash flow hedges?
A)Realized gains and losses appear in Retained Earnings.Unrealized gains and losses appear in net income.
B)Realized gains and losses appear in Other Comprehensive Income.Unrealized gains and losses appear in net income.
C)Realized gains and losses appear Shareholders' equity.Unrealized gains and losses appear in Other Comprehensive Income.
D)Realized gains and losses appear in Retained Earnings.Unrealized gains and losses appear in Other Comprehensive Income.
E)Realized gains and losses appear in net income.Unrealized gains and losses appear in Other Comprehensive Income.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, for securities available for sale and cash flow hedges, realized gains and losses are reported in net income, while unrealized gains and losses are reported in Other Comprehensive Income (OCI) and accumulate in the accumulated other comprehensive income (AOCI) section of shareholders' equity until realized.

In USGAAP, Which of the Following Accurately Describes the Effects of of Transactions