标题: Revaluation of AFS [打印本页] 作者: bcp901 时间: 2011-7-11 19:12 标题: Revaluation of AFS
Hi, I only thought that while revaluing the equity ( or bonds) investments, the revaluation reserve will be credited and investment asset will be debited.
But there are companies whose practice is to credit revaluation reserve and debit a fictitious account like invt reserve, instead of assets directly. Reasons for this might be the companies don't want to inflate the value of their investments ( though all are classified as available for sale). In this case their total revaluation reserve would be nil (debit credit offset). How can then the AFS reported at the fair value when unrealised gains are not added?Seems strange to me. Has any one come across such thing? Can anyone explain the logic to me?
Thanks作者: yospaghetti 时间: 2011-7-11 19:12
I have not see the cases you describe. What I have seen is that AFS investments are shown as assets with unrealized G/L shown in equity, and nothing in I/S. But my guess is that as long as they record them at FV, whether by adjusting the asset itself or its companion account, it should be ok.作者: jacksparrow 时间: 2011-7-11 19:12
Yes Dreary. I think that it is just a way of presentation . Assets are revalued at their FV anyway in this case.
