Writing Assignment (Going around the income statement)
FASB Statement No. 115 outlines two different treatments for unrealized gains and losses depending on whether the security is classified as trading or available for sale. Unrealized gains and losses for trading securities are reported on the income statement while unrealized gains and losses for available for sale securities are reported as part of accumulated other comprehensive income in stockholders’ equity. Your assignment is to develop an argument, in writing, for including unrealized gains and losses for available for sale securities on the income statement. Include in your 1 page paper reasons as to why the FASB might have chosen the reporting rules that it did and be able to refute the Board’s reasoning.