How each impact the income statment and cash flow statment. This is one of the only things left tripping me up on FRA.
Held for trading-reported at fair value on the balance sheet, interest, dividends, realized and unrealized gains and losses are recognized on the income statement
Available for sale- reported at fair value on balance sheet, dividend, interest realized gains or losses recognized on income statement. unrealized gains or losses is recognized in other comprehensive income.
Held to maturity- reported at amortized cost on balance sheet. Only interest and realized gains or losses are reported on income statement.
As for the cash flow statement: when you buy them you have a CFI outflow, when you receive coupon payments or dividends you have a cash inflow (CFO under US GAAP, CFO or CFI under IFRS), and when you sell them you have a CFI inflow. It’s the same no matter how you designate them.
Thanks guys.
My pleasure.