ACC 309 Final ProjectMary WrightWeek Three SubmissionFinal Project Draft Milestone 1 Management Brief – Milestone OnePeyton Approved has marketable securities listed on the balance sheet that are availablefor sale at a total cost of 5,500,000. The fair market value, of these securities, is currently5,235,000. These marketable securities are considered and will need be recorded as othercomprehensive income[Fra18]. Since the cost of the marketable securities is more than the fairmarket value, Peyton Approved will need to recognize this as an unrealized holding loss on thebalance sheet[Fra18]. The total loss incurred amounts to 265,000(5,500,000 – 5,235,000). Oncethe securities have been sold it will either be recorded as a realized loss on the income statementor a realized gain depending on what their selling price amounts to[Fra18].Other comprehensive income is not included in net income on the income statementbecause it has not yet been realized[Ste19]. The three main parts that make up othercomprehensive income are pension adjustments, unrealized gain/loses (especially on availablefor sale securities), and foreign currency translations[Pro19]. Reporting other comprehensiveincome assists the shareholders by providing them with a more comprehensive view of where themarketable securities are currently at[Fra18]. Although there may currently list a loss in PeytonApproveds other comprehensive income, that does not necessarily mean that a loss will beincurred when the securities are sold. Shareholders may be able to predict based on what is listedin other comprehensive income, if the company at hand is truly a good investment overall. 1 | P a g e
ACC 309 Final ProjectIt is critical to always consider the shareholders in every financial decision that thecompany makes[Chine]. This consideration is so important because the shareholders arebasically the owners of the business[Chine]. Shareholders equity is the difference between thecompany’s assets and its liabilities. Shareholders equity is impacted by four main things, net
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