CFA Level I · CFA Level I Exam · Analyzing Balance Sheets
A company's shareholders' equity section includes share capital, retained earnings, and a balance arising from unrealized gains on financial assets measured at fair value through other comprehensive income. That last balance is most likely reported as:
The balance is most likely reported as accumulated other comprehensive income within equity. Unrealized gains on assets measured at fair value through OCI bypass profit or loss and accumulate in equity. They are neither a liability nor treasury shares, which are repurchased own shares.
- Aaccumulated other comprehensive incomeCorrect
- Ba current liability
- Ctreasury shares
Explanation
Unrealized gains on FVOCI assets bypass profit or loss and accumulate in other comprehensive income within equity. They are not liabilities, and treasury shares are repurchased own shares, a deduction from equity.
Did you get it right without looking?
One question tells you little. A timed set on Analyzing Balance Sheets shows your real accuracy, how long you take and where you lose marks.
More Analyzing Balance Sheets questions
- A company issues a 3-year, 4% annual-coupon bond with face value $1,000,000 when the market rate is 6%, so it receives $946,500. Under IFRS …
- Under IFRS, a classified (current/non-current) balance sheet presentation is most likely preferred over a liquidity-based presentation when:
- At year-end, a company has a 600 loan due in 8 months that it intends to refinance. Its lender agreement gives it no right at the reporting …
- An IFRS reporter has a cash-generating unit with a carrying amount of 900 (including goodwill of 100). Fair value less costs of disposal is …
- Under IFRS, inventories are most likely measured at:
- A company's financial statements are prepared under IFRS. A lawsuit has been filed against it, and its lawyers assess the chance of losing a…