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Essay Subject: A memorandum based on the Accounting Standards Code concerning the rules and disclosure requirement ...... More...

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Paper Abstract: A memorandum based on the Accounting Standards Code concerning the rules and disclosure requirement for investment in securities. Paper Introduction: Internal MemorandumTo Mark PorterFrom Your NameDate November Subject Decatur Industry Revenue BondsThis memo is a response your questions concerning the financial reportingfor this transaction When is the fair value of a security readily determinable The fair value of a security can be determined under any of threeconditions If sales prices or bid-and-asked quotations are currentlyavailable on a securities exchange registered with the U S Securities andExchange Commission SEC or in the over-the-counter market provided thatthose prices or quotations for the over-the-counter market Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. In the case of available for sale securities thiscould reflect a change in market price of any other fundamental change inthe position of the company issuing it or the security itself, Section 32 -1 -55-S99-1 If the security is to be held to maturity and there is no reason tosuspect that the full amounts of principle and interest will not be paidthere is no impairment of value until such a loss is realized at maturity.A Government bond that has fallen in price to reflect changes in the moneymarket is considered only temporarily impaired in value based on the changein market price. These include, ...an entity shall disclose all of thefollowing in the notes to the financial statements for each period forwhich the results of operations are presented. The circumstancesleading to the decision to sell or transfer the security. Provide a rationale for yourchoice. What disclosures must be made for any sale or transfer of securitiesclassified as held-to-maturity? Section 32 -1 -25-s3. 2.) The fair value of an equitysecurity traded only in a foreign market is readily determinable if thatforeign market is of a breadth and scope comparable to one of the U.S.markets referred to above. The expression high probabilityindicates that there is a real if slight chance that the securities willnot be held to maturity, but may be sold earlier. How close to the maturitydate could Lennon sell the bonds and still classify the investment as held-to-maturity? The classification holdto maturity is specific in that management has made a clear and documenteddecision to hold the securities to maturity. Section 32 -1 -65-14. High probability isnot positive intent. 1.) If sales prices or bid-and-asked quotations are currentlyavailable on a securities exchange registered with the U.S. Section 32 -1 -5 -1 5. According to the code, all sales or transfers of held-to-maturitysecurities are subject to the disclosure requirements of paragraph 32 -1 -5 -1 , regardless of the treatment of remaining held-to-maturitysecurities. If there is demonstrable reason to believe that asecurity intended to be held to maturity will fail to pay all interest andprinciple due then it must be revalued. As you have indicated only that there is a highprobability that these securities will be held to maturity they could notbe properly designated as hold to maturity securities. When would the investment in an available-for-sale or a held-to-maturitysecurity be considered to be impaired? How would you classify the investment? The fair value of a security can be determined under any of threeconditions. When is the fair value of a security readily determinable? To classify the Decatur bonds as hold to maturity assets it would haveto indicate the positive intent and the financial capability to do so.Section 32 -1 -25-1. What requirements would Lennon have to meet to classify the investmentin Decatur Industries bonds as held-to-maturity? These include, 1.) The netcarrying amount of the sold or transferred security 2.) The net gain orloss in accumulated other comprehensive income for any derivative thathedged the forecasted acquisition of the held-to-maturity security. There are conditions such actualdeterioration of the issuers credit position is available, and not simplyspeculation where sale of a security prior to maturity is not contradictoryto the hold to maturity designation. Lennon could sell the securities at any time, but such an action wouldcall into questions the investor's stated intent to hold other debtsecurities to maturity in the future. 3.)The related realized or unrealized gain or loss. The investment in the securities of Decatur Industries do not qualifyas held to maturity investments because "high probability" that they willbe held is not the same as "positive intent". Securities andExchange Commission (SEC) or in the over-the-counter market, provided thatthose prices or quotations for the over-the-counter market are publiclyreported by the National Association of Securities Dealers AutomatedQuotations systems or by Pink Sheets LLC. Internal MemorandumTo: Mark PorterFrom: Your NameDate: November 21, 2 9Subject: Decatur Industry Revenue BondsThis memo is a response your questions concerning the financial reportingfor this transaction.1. Section 28 -1 -2 As the Decatur Industries bonds are traded in the OTC market theirvalue would clearly be readily determinable.2. The question seems to be in reference to anything that is "other thana temporary" impairment. This differentiation ofintent and probability is the clear indication of the accounting standardscode as presented in section 32 -1 -25-1. 4. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.