标题: Book Value of Equity [打印本页] 作者: mdfb79 时间: 2013-4-6 02:55 标题: Book Value of Equity
Does the book value of equity change when we reclassify trading securities to available-for-sale?作者: hassan 时间: 2013-4-6 02:59
nopes - both are already carried at Market values作者: bkballa 时间: 2013-4-6 03:03
but even if they’re both recorded at market value, isn’t there still a difference in equity?
The book value would be biased because if the investment was a trading security, its unrealized gain for example, would increase income, and the effect of this investment after tax would should up in Equity. However, if the investment was considered available-for-sale, its unrealized gain would be recognized directly in Equity, without the tax deduction.
The difference would be the tax paid on the investment, therefore incorrectly stating the book value of equity. What am I doing wrong?作者: ftwcfa 时间: 2013-4-6 03:07
I think unrealized g/l in other comprehensive income for the avail-for-sale security would be net of tax.作者: JustasS 时间: 2013-4-6 03:11
I think they are as well (net of tax) even tho I’ve never come across an example where it made you deduct the tax
