Available-for-Sale (AFS) Securities definitions Flashcards
Available-for-Sale (AFS) Securities definitions
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Available-for-Sale Securities Equity or debt investments intended to be sold in the future, but not actively traded or held to maturity. Fair Value Current market price used to measure the carrying amount of investments after initial recognition. Other Comprehensive Income Equity section where unrealized gains or losses from certain investments are reported, separate from net income. Unrealized Gain Increase in investment value not yet sold, reported in equity but not affecting net income. Unrealized Loss Decrease in investment value not yet sold, reducing equity through a separate account from retained earnings. Dividend Revenue Income from dividends received on investments, reported as non-operating income in the income statement. Comprehensive Income Statement Financial statement showing net income plus items like unrealized gains or losses affecting equity. Journal Entry Accounting record documenting transactions such as purchases, dividends, and fair value adjustments. Carrying Value Amount at which an investment is reported on the balance sheet, adjusted for fair value changes. Realized Gain Profit recognized in the income statement when an investment is sold for more than its carrying value. Realized Loss Loss recognized in the income statement when an investment is sold for less than its carrying value. Equity Owner's residual interest in assets, increased or decreased by items in other comprehensive income. Retained Earnings Accumulated net income not distributed as dividends, unaffected by unrealized gains or losses in AFS securities. T Account Visual tool used to track changes in account balances, such as investments and unrealized gains or losses. Non-Operating Income Income not related to core business activities, such as dividend revenue from investments.
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