Question: I am posting this question for the third time because I have posted twice already only to receive the same unsubstantial response. I would like another expert to help me with my question, other than the expert Anonymus, please. He/she is the person that attempted to answer the question previously.
Dell Computer Corporation has significant investment activities. The following items are from Dell's 2010 financial statements (amounts are in millions):
|
Short-term investments
Long-term investments
|
$373
$781 |
| Investment income |
$134 |
| Purchase of investments |
$1,383 |
| Sales of investments |
$1,538 |
| Change in unrealized gains (losses) on long-term investments, net |
$6 |
Dell states that all debt and equity securities are classified as available-for-sale and are subject to an annual impairment test.
1. Where would you find each of the above items in Dell's financial statements?
2. What value (cost or fair value) would you expect the first two items on Dell's balance sheet to represent?
3. What are impairments, and how do they differ from unrealized losses on long-term investments?