CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following changes in financial position should be recorded but should not enter into the determination of net income, as identified by the FASB?
A. Events that are recognized but not realized.
B. Events that are recognized and realized.
C. Events that are not realized or recognized.
Explanation: These events are called elements of other comprehensive income, and are recorded as direct adjustments to stockholders' equity rather than as elements in the determination of net income. The components of comprehensive income are presented net of income tax.

User Contributed Comments 2

User Comment
kalps Unrealised but recognised are shown under adjustment to stockholders equity - the componenets are shown net of income tax).
cbb1 These items included foreign exchange transaction and unrealized gains/losses on "available for sale" (but not trading) securities.
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