Which of the following is not a reason to consider a decline in the fair value of a debt investment to be "other than temporary"?
A) The investor determines that a credit loss exists on the investment.
B) The investor intends to sell the investment.
C) The investor believes it is "more likely than not" that the investor will be required to sell the investment prior to recovering the amortized cost of the investment less any credit losses arising in the current year.
D) The investor intends to hold the investment to maturity.

Question

Quizplus · Accepted Answer

A decline in the fair value of a debt investment is considered "other than temporary" and requires recognition in earnings if the investor intends to sell the investment, believes it is more likely than not they will be required to sell before recovery, or a credit loss exists. Intending to hold the investment to maturity suggests the investor does not anticipate selling it due to temporary declines, thus not fitting the criteria for an "other than temporary" decline.

Which of the Following Is Not a Reason to Consider