All of the following are true of fair value accounting except
A) GAAP requires trading and available-for-sale investments to be recorded at fair value
B) fair value measurements have become more reliable
C) the differences between original cost and fair value are reported in valuation allowance accounts
D) fair values only affect balance sheet accounts

Question

Quizplus · Accepted Answer

Fair value accounting impacts both the balance sheet and the income statement. Changes in fair value can affect the income statement through unrealized gains or losses on investments, for example, which are recognized in earnings for certain types of investments.

All of the Following Are True of Fair Value Accounting