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Where does the Unrealised Holding Gain/Loss – Net Income account appear in the financial statements?
AAs part of cost of sales in the statement of profit or loss
BAs a current liability on the statement of financial position
CWithin operating revenues in the statement of profit or loss
DWithin the other comprehensive income section, after net income
Answer & Solution
Correct answer: D. Within the other comprehensive income section, after net income
1. The account captures unrealised changes in the fair value of investments under 20% ownership.
2. It is reported in the other comprehensive income section.
3. This section appears after the net income line, with the result giving comprehensive income.
4. It is not part of operations or cost of sales, and it is not a liability.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §4.9.2 "Adjust to Fair Value", p.185_
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