Intermediate Accounting Chap012.pptVIP

CH 12 Investments P644 GRAPHIC 12-8 * Part IAppendix 12B—Impairment of Investments If the fair value of an investment declines to a level below cost, and that decline is not viewed as temporary, companies typically have to recognize an other-than-temporary (“OTT”) impairment loss in earnings. We use a three-step process to determine whether an OTT impairment loss must be recognized: (1) determine if the investment is impaired, (2) determine whether any impairment is OTT, and (3) recognize any OTT impairment in the financial statements. * Trading securities are presented on the financi