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