ACC 603 Lecture Notes - Lecture 1: Historical Cost

• School: University of Miami
• Department: Accounting Business Administration
• Course: ACC 603
• Professor: Oscar Holzmann

Document Summary

Step 2: evaluate whether an impairment is other than temporary. Despite the following reasons that may indicate a temporary impairment in debt securities: the investment is impaired because the fair value is less than the amortized cost (asc. We disagree with the management"s classification because of the april 30, 2010 sale of securities (short amount of time after the balance sheet date and unreasonable reasons for sale) indicating the intent to sell. Hence, the debt securities shall be classified as otti and be tested for otti. The impairment amount (realized loss) should be recognized in earnings or other comprehensive. Income as of march 31, 2010 and the debt securities shall be recorded at amortized cost less the. Impairment: our position would depend on whether the 2% drop below historical cost of the fair value of the debt securities was caused by significant adverse conditions. Otherwise, 2% is immaterial and would not be considered an impairment and shall not be recognized.