Smith buys and sells securities, which it typically classifies as available for sale. On December...
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Smith buys and sells securities, which it typically classifies as available for sale. On December 15, 2016, Smith purchased $506,000 of Jones shares and elected the fair value option to account for the Jones investment. As of December 31, 2016, the Jones shares had a fair value of $579,000. In the 2016 financial statements, Smith will report (ignore taxes):
An investment in Jones of $506,000.
Investment income of $73,000 in its income statement.
Other comprehensive income of $73,000.
Accumulated other comprehensive income of $579,000.
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