Under the fair value through other comprehensive income model, with recycling, previously unrealized holding gains and/or losses to the date of disposal are
A) ignored.
B) transferred to retained earnings.
C) transferred to net income.
D) transferred to "Unrealized Gain or Loss - OCI."

Question

Quizplus · Accepted Answer

Under the fair value through other comprehensive income (FVTOCI) model with recycling, previously unrealized holding gains or losses are transferred to net income upon the disposal of the asset. This process is known as recycling, where gains or losses that were initially recognized in other comprehensive income (OCI) are reclassified to profit or loss (net income) when the asset is sold or the investment is realized.

Under the Fair Value Through Other Comprehensive Income Model, with Recycling