According to the book there’re 4 ways to classify minority passive investments. HTM, HFT, AFS, and Designated at fair market value. What’s the difference btw HFT and Designated at fair market value? Even in the example, the classifications are all the same (interest & unrealized GL recognized in Income, Fair MV in Bsheet, No effect in Equity).
Anyone found the difference? Thanks.作者: franzino 时间: 2013-4-5 22:58
there are 3 ways to classify the investments.HTM HFT AFS. there are TWO ways to report the value of those assets on the balance sheet. One way is the amortized value (held to maturity, i remember that because the word AMORT is hidden in held TO MAtuRity) and the other way is the Fair Market Value (AFS and HFT). Fair market value is not a classification.作者: trogulj 时间: 2013-4-5 22:58
Designating fair market value means you would take a HTM security and mark to market every quarter, with unrealized gains and losses recorded on the I/S. It is also irrevocable once you designate a security fair market value.
I can’t believe I remembered that.作者: jawz 时间: 2013-4-5 22:58
it’s irrevocable under GAAP not under IFRS作者: Daniel1985 时间: 2013-4-5 22:58
So under IFRS there’re actually only three ways of classification, but the book somehow still educates us GAAP hence additional thing. Thanks guys.
