A companys portfolio of available-for-sale securities, Ask an Expert

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A company's portfolio of available-for-sale securities consists of the common stock of one company. At the end of the prior year, the fair value of the security was 50% of original cost, and this reduction in fair value was reported as an other than temporary impairment. However, at the end of the current year the fair value of the security had appreciated to twice the original cost.

Instructions: What is the effect upon carrying value and earnings for the situation above?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9965562

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