cv4cfa

cost basis means cost. Just know under AFS, if the asset changes in value then the unrealized gain or loss sits in OCI as a "waiting room" until you sell it or it matures and then you realize the gain/loss. The example on pg 128 helps...I think the AFS unrealized gain of 53,000 is just the 350k-300k cost plus the 3k amortization, but why is this 3k a gain? I thought we bought the thing for 300 but par is only 275 so isn't that buying it at a premium so we have to mark it down to par val?