When an impairment of an equity investment that is classified as available for sale occurs for a reason that is judged to be "other than temporary," the investment is written down to its fair value and the amount of the write-down is:

Question

Quizplus · Accepted Answer

When an impairment of an equity investment occurs and is judged to be "other than temporary," the investment is written down to its fair value, and the amount of the write-down is included in income. This means that the loss is recognized on the income statement, which reduces the overall net income of the company. The other answer choices (A, C, and D) are not accurate because the write-down is not recorded as a deferred credit, deferred asset, or treated as unrealized.

When an Impairment of an Equity Investment That Is Classified