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  • Two Alternative Ways To Deal With Fair Value Adjustment Account When Sell A Security

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    The document provides examples of two methods for adjusting the carrying value of investments to fair value at the fiscal year end. Method one performs a single adjustment at the fiscal year end, while method two adjusts after each transaction during the fiscal year. For the first example, the carrying value was adjusted upwards by $9,537 and $5,000 on the given dates. In the second larger example, the carrying value was adjusted upwards by $35,550 and $66,100 on the dates shown.

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    Two alternative ways to deal with fair value adjustment account when sell a security

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    The document provides examples of two methods for adjusting the carrying value of investments to fair value at the fiscal year end. Method one performs a single adjustment at the fiscal year end, while method two adjusts after each transaction during the fiscal year. For the first example, the carrying value was adjusted upwards by $9,537 and $5,000 on the given dates. In the second larger example, the carrying value was adjusted upwards by $35,550 and $66,100 on the dates shown.

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    © All Rights Reserved
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    1 views2 pages

    Two Alternative Ways To Deal With Fair Value Adjustment Account When Sell A Security

    Uploaded by

    bafsvideo4
    The document provides examples of two methods for adjusting the carrying value of investments to fair value at the fiscal year end. Method one performs a single adjustment at the fiscal year end, while method two adjusts after each transaction during the fiscal year. For the first example, the carrying value was adjusted upwards by $9,537 and $5,000 on the given dates. In the second larger example, the carrying value was adjusted upwards by $35,550 and $66,100 on the dates shown.

    Copyright:

    © All Rights Reserved
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    of 2

    Example on PPT23-28

    Method one - Fiscal year end adjustment

    Investment
    Investment (Carrying + Fair Value Adjustment =
    (Fair Value)
    Value)

    9,537

    @31/12/2022 293,537 9,537 284,000

    677 4,537

    94,214

    @31/12/2023 200,000 5,000 195,000

    Method Two: Transaction by transaction adjustment

    Investment
    Investment (Carrying + Fair Value Adjustment =
    (Fair Value)
    Value)

    9,537

    @31/12/2022 293,537 9,537 284,000

    677

    94,214 10,063

    19,600

    14,600

    @31/12/2023 200,000 5,000 195,000


    Example on PPT44-50
    Method one - Fiscal year end adjustment
    Investment
    Investment (Carrying + Fair Value Adjustment =
    (Fair Value)
    Value)

    35,550

    @31/12/2022 718,550 35,550 683,000

    259,700

    255,000 101,650

    @31/12/2023 713,850 66,100 779,950

    Method Two: Transaction by transaction adjustment

    Investment
    Investment (Carrying + Fair Value Adjustment =
    (Fair Value)
    Value)

    35,550

    @31/12/2022 718,550 35,550 683,000

    259,700 15,300

    255,000

    50,850

    116,950

    @31/12/2023 713,850 66,100 779,950

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