21. An unrealized gain or loss on trading securities is reported as a separate component of equity.
22. A decline in the fair value of a trading security is recorded by debiting an unrealized loss account and crediting the Fair Value Adjustment account.
23. If the fair value of a non-trading security exceeds its cost, the security should be written up to fair value and a realized gain should be recognized.
24. Non-trading securities are securities bought and held primarily for sale in the near term to generate income on short-term price differences.
25. Held-for-collection securities are debt securities that the investor has the intent and ability to hold to maturity.
26. Companies close the Fair Value Adjustment–Trading account at the end of each reporting period.
27. Non-trading securities should always be reported at fair value and classified as current assets on the statement of financial position.
28. Because they are highly liquid, short-term investments are included as part of cash in the current assets section of the statement of cash flows.
29. Companies generally report long-term assets in a separate section immediately above current assets on the statement of financial position.
30. Unrealized gains and losses on non-trading securities are reported as a separate component of equity on the statement of financial position.