An Unrealized Holding Gain (or Loss) on Investments classified as "available-for-sale"...

Question:

An Unrealized Holding Gain (or Loss) on Investments classified as "available-for-sale" securities:

a) Is reported in the asset section of the balance sheet, as an adjustment to the carrying value of the marketable securities.

b) Is reported in the stockholders' equity section of the balance sheet, as either an increase or decrease in total stockholders' equity.

c) Appears in the current period income statement, combined with realized gains and losses from sales of securities.

d) Indicates the amount of cash a company would receive if the marketable securities were sold as of the balance sheet date.

Answer and Explanation:

An Unrealized Holding Gain (or Loss) on Investments classified as "available-for-sale" securities Is reported in the asset section of the balance sheet, as an adjustment to the carrying value of the marketable securities. (A)

Unrealized Holding Gain or (Loss) becomes part of the Accumulated Other comprehensive income which is part of the stockholders' equity.


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