Realized/Unrealized Gains and Losses, Current vs. Temporal

Can anyone explain the different treatment of unrealized/realized gains and losses in temporal vs. current method? Thanks.

Are you talking about passive securities?

I think so. I’m using Stalla and CFAI text mainly, but I bought book 7 from Schweser to practice, and there is a question- #29 in the section with old CFA questions, that has a professor’s note saying: “See Figure 10 on page 256 from Book 2 of the Schweser Study Guide for an explanation of how realized and unrealized gains and losses are reported under each method.” (current vs. temporal). I don’t have the guide, and I wasn’t sure what they meant. Maybe they are just referring to one method bringing volatility to the IS and the other bringing vol to the BS?

This question doesn’t ring a bell. I don’t think LOS cover this particular situation.

Hi, I don’t remember LOS but in Schweser notes the treatment of realized and unrealized G/L under all current and temproral method is given. Temporal method monetary assets-realized and unrealized G/L------ Income statment Non-monetary assets Unrealized G/L----ignored realized G/L on inventory-----included in COGS realized G/L on Fixed assets----- included in Depreciation. All current method-realized and unrealized G/L—BS Hope i rememeber it correctly. Someone needs to confirm.

it is in the schweser text…a line or two…but rakehs summarizes it well enough…i don’t have my books in front of me to confirm…will try and check it later tonight

the treatment would still be based on the classification of security no?

ok… schweser Book 2 page 256 - chart at bottom of page summarizes it all… and rakesh above is 100% right…