Available for Sale securities-Result of investment on B/S

[h21]

For example, when asked whats the AFS’ result of investment on B/S, do we just count fair value or do we include the OCI amount also? why not, OCI is on B/S, no?

 

[Flashback]

AFS
Double entry bookkeeping always apply.
Any change in value after initial recognition.
Debit/credit +- Credit/Debit -+
BS Asset OCI
Remember that OCI is part of BS (equity), not P/L.
In P/L you make entries of AFS upon following:

• Dividends/coupon collected or accrued
• Derecognition (sale, eliminating or reclassification)

 

[h21]

Flashback wrote:
AFS
Double entry bookkeeping always apply.
Any change in value after initial recognition.
Debit/credit +- Credit/Debit -+
BS Asset OCI
Remember that OCI is part of BS (equity), not P/L.
In P/L you make entries of AFS upon following:

• Dividends/coupon collected or accrued
• Derecognition (sale, eliminating or reclassification)

based on what you are saying here, in BS it should be recorded as original cost then, but it is fv, why

 

[Flashback]

Initial recognotion (purchasing)
BS Financial Assets Cash
+ -
After measuring at least on 31 December of each further period
Change in value
BS Financial Asset BS OCI
+ or - + or -
Meanwhile during period (year)
Dividend accrued BS A Receivable for dividend
P/L revenue + (credit) + (debit)
Dividend collected
BS A receivable for dividend BS Cash account
- (credit) + (debit)
Hope this helps. Now I must go repeat Alternatives and feel like I have CFA overdose…

 

[data storm]

i’d say,
Balance sheet effect would be ” + Change in the fair value ” and + “Unrealized gain in OCI”
Income statement effect ” any realized gain on these securities i.e “dividend” or sale.