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Gloria Deal AC501: Financial Accounting and Reporting Unit 4 Assignment AIA AIA 14-10 (Fair Value) Addison Manufacturing holds a large portfolio of debt and equity securities as an investment. The fair value of the portfolio is greater than its original cost, even though some securities have decreased in value. Ted Abernathy, the financial vice president, and Donna Nottebart, the controller, are near year-end in the process of classifying for the first time this securities portfolio in accordance with FASB Statement No. 115. Abernathy wants to classify those securities that have increased in value during the period as trading securities in order to increase net income this year. He wants to classify all the securities that have decreased in value as available-for-sale (the equity securities) and as held to maturity (the debt securities). Nottebart disagrees. She wants to classify those securities that have decreased in value as trading securities and those that have increased in value as available-for-sale (equity) and as held-to-... View Full Document

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