U.S.GAAP and IFRS require firms to account for debt securities designated as held to maturity at _____ except that they are also subject to _____.That is, firms do not recognize increases in fair value (unrealized gains) but might recognize decreases in fair value(unrealized losses).

Question

Quizplus · Accepted Answer

U.S.GAAP and IFRS require firms to account for debt securities designated as held to maturity at amortized cost except that they are also subject to impairment. This means that firms do not recognize increases in fair value (unrealized gains) but might recognize decreases in fair value (unrealized losses). Therefore, option A, which mentions amortized cost and impairment, is the correct choice. Options B, C, D, and E are incorrect as they do not accurately describe the accounting treatment for debt securities designated as held to maturity.

USGAAP and IFRS Require Firms to Account for Debt Securities