From: US GAAP for Life Insurers (Ch 13)
This reading says the benefit of classifying securities as 'AFS' is that changes in fair value are recognized in Other Comprehensive Income (OCI).
It says that the 'general ledger' continues to show the amortized cost of the bond.
I'm having trouble seeing what the benefit is of doing this. Is the case that your net income will continue to use the amortized value of the security, which leads to smoother earnings?
The fair value is then only represented in this sort of separate section called OCI that people pay less attention to?
This reading says the benefit of classifying securities as 'AFS' is that changes in fair value are recognized in Other Comprehensive Income (OCI).
It says that the 'general ledger' continues to show the amortized cost of the bond.
I'm having trouble seeing what the benefit is of doing this. Is the case that your net income will continue to use the amortized value of the security, which leads to smoother earnings?
The fair value is then only represented in this sort of separate section called OCI that people pay less attention to?
Benefit of classifying securities as 'Available for Sale'
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