Testing for impairments of debt investments is a three step process: Measure the impairment loss, determine where to present it, and assess whether there is a reversal needed in later periods.
Summarize the financial disclosure requirements for investments accounted for under the equity method.
Which of the following is not an impairment indicator for investment securities?
A) fluctuating stock prices
B) deterioration of earnings
C) decline in credit rating
D) adverse changes in the economy
Can impairment losses recorded on held-to-maturity debt investments be reversed at a later date?
A) Yes, prior unrealized losses can be reversed, but the reversal is limited to the balance in the account, Allowance for Credit Loss: Held-to-Maturity Debt Investment.
B) No, impairment losses cannot be reversed.
C) Yes, but only non-credit losses recorded in Other Comprehensive Income.
D) Yes, but only credit losses recorded in Other Comprehensive Income.