Question #16

Reading: Reading 8 Intercorporate Investments

PDF File: Reading 8 Intercorporate Investments.pdf

Page: 7

Status: Incorrect

Correct Answer: A

Your Answer: C

Part of Context Group: Q16-18 First in Group
Shared Context
- The marketable securities balance amount shown on the balance sheet is: A) $3,000,000.00. B) $3,100,000.00. C) $3,200,000.00.
Question
In late 20X6, Company X decided to reclassify the investments in stock. What classification can the company classify the investment in stocks to?
Answer Choices:
A. Fair value through profit or loss or amortized cost
B. Reclassification would not be allowed
C. Fair value through profit or loss only
Explanation
The initial choice of classification into fair value through OCI is irrevocable and reclassification is not allowed for equity securities.
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