FOr other comprehensive income, it includes unrealized gains and losses for available for sale securities. Where do realized gains/losses for AVS securities go? Are they already in net income?
Realized gains are always included in net income. Always and forever amen. Along with interest and dividends.
Furthermore, when AVS securities are sold, the net unrealized gain/loss is reversed out of OCI and the entire gain/loss (since inception) is run through the income statement.
Realised gain is the part of Net Income, But the unrealised gains or losses of Available for sale and Held to maturity included in OCI.
Back to comment 2… isn’t dividends taken out of Equity?
So they are not part of Net Income.
Sorry, im thinking of dividends in seperate ways, (not as if you hold securities that payyou dividends)
So, to be clear:
Dividends paid by the company to shareholders obviously come out of net income and affect retained earnings and equity. Dividends received through investments are included in net income as part of income from continuing operations. Interested received on investements is part of income from continuing operations. Interest paid is an expense that is deducted from/is part of income from continuing operations.
Is this correct?
Dividends paid don’t come out of net income (in the sense that they don’t show up on the income statement); paying dividends is strictly a balance sheet activity. (Note: dividends are removed from retained earnings when declared, not when paid.)
The rest is correct.