标题: Avail-for-Sale vs Trading [打印本页] 作者: bcp901 时间: 2011-7-13 15:57 标题: Avail-for-Sale vs Trading
One of the practice exams said that D/E ratio is the same for both methods. How is this possible when Unrealized gains/losses under available for sale securities are reflected in the S/H Equity portion of the Balance sheet????作者: Rasec 时间: 2011-7-13 15:57
I believe this is because under the trading method, unrealized gains and losses are recognized on the IS, so they flow through to S/H Equity in retained earnings. So in the end unrealized gains/losses show up in S/H equity for either method.作者: DSquaredSlim 时间: 2011-7-13 15:57
Trading gains losses: Reflected on IS, which plows through to retained earnings which falls under the equity section.
AFS gains/losses: Reflected as a direct charge to equity, bypassing the income statement.
They are the same, with the exception of whether or not the amount gets reflected on the IS.
NO EXCUSES作者: llxx 时间: 2011-7-13 15:57
How does the taxes on amounts that pass through IS affect this ?作者: kkn006 时间: 2011-7-13 15:58
You do the same in equity too..so you add after tax G/L.
