Qbank says: “When a passive investment in marketable equity securities is classified as available-for-sale, US GAAP requires that unrealized gains and losses are reported on the balance sheet in comprehensive income in shareholders’ equity, while under IAS the firm can elect to report on either the income statement or as comprehensive income on the balance sheet.” Is the above still true? The only difference I see when it comes to A-for-S is that under IFRS forex gain/losses are recog’d in the I/S (under US GAAP still recog’d in equity). Anyone?
qbank is very moody. that’s all i have to say.
^yes, pepp. I’m loosing confidence in it. Doesn’t seem that they weeded out the old questions this year. I may just stick to practice tests and challenge question at the end of chapters here on out.
I remember coming across that question… I have no idea if it’s true or not. I’ve stopped using qbank and now just do random vignette’s from Stalla and Book7 as my practice questions.
i think i remember seeing somewhere in the textbooks that under IAS firms can choose. i just googled it and 2 diff pages had diff answers–one said only equity one said either one. who the hell knows.
I’m pretty sure I read that exact line somwhere yesterday and it wasn’t Qbank as I haven’t looked at Qbank for a week or so.
I am sure that IFRS deals this thing in the same way as GAAP. The only difference is that GAAP AFS unrealized gains & losses go to Comp. Inc. while IFRS goes directly to Equity. If you want to check for unrealized gains & losses for statements conforming with IFRS you gotta check it in the Statment of changes in equity.
so do ifrs have an OCI account? or does it have an OCI but doesnt put AFS unrealized gains and losses in there?
It doens’t have Other Comp. Income. Goes directly in equity. Coz of this you can check about the movements just by looking at the statement of changes in equity.
OCI in IFRS is called D2E (Direct to Equity).
I too have read it somewhere. Accounting treament for AFS in IFRS is to take the Unrealized G/L and report it on Income Statement and not on Balance Sheet. Will need to check and confirm.
Unrealized gains/losses due to Foreign exchange movements on AFS securities are reported on the Income statement. if a company chooses to “designate fair value” on an AFS security - any unrealized gains / losses are reported on the Income statement - and this I believe is true for both IFRS and US GAAP. Schweser Pg. 117
Secret Sauce 2008 Page 51 Available for Sale: Difference betw US GAAP & IAS Co. can elect to report unrealized gains/losses as comprehensive income in stockholders equity or on the income statement
that is so 2008,
The new page is 53
So the 2009 version doesn’t have that bit of text?