image image image image image image

(Solution) Miller Corp’s marketable equity securities portfolio

Miller Corp’s marketable equity securities portfolio acquired earlier this year is reported as follows:

Category Fair Value through Profit or Loss Fair Value through Other Comprehensive Income
Cost €64,000 €75,000
Fair Value €48,000 €62,000

According to IFRS, Miller should report an unrealized holding loss in its current year income statement of:
a. €13,000
b. €16,000
c. €29,000

Related: (Solution) Investment adjustment required under IFRS

Solution – Unrealized holding loss on Marketable equity securities portfolio

To determine the unrealized holding loss that Miller Corp should report in its current year income statement according to IFRS, we need to analyze the provided information about the marketable equity securities portfolio.

Given Data

Fair Value through Profit or Loss:

  • Cost: €64,000
  • Fair Value: €48,000

Fair Value through Other Comprehensive Income:

  • Cost: €75,000
  • Fair Value: €62,000

Step 1: Calculate Unrealized Holding Losses

  1. Fair Value through Profit or Loss (FVTPL):
    • Unrealized Holding Loss = Cost – Fair Value
    • Unrealized Holding Loss FVTPL =€64,000−€48,000=€16,000Correct
  2. Fair Value through Other Comprehensive Income (FVOCI):
    • Unrealized Holding Loss = Cost – Fair Value
    • Unrealized Holding Loss FVOCI =€75,000−€62,000=€13,000Correct

Please click on the Icon below to purchase the FULL ANSWER at only $2