Determinable Fair Value of a Security
Teton Co. trades on the over-the-counter markets and therefore does not trade on one of the large stock markets. According to the FASB Section 320-10-20 the fair value of Teton Co.’s bonds are “readily determinable” because it is in the over-the-counter market. This is only if the prices or quotes are publicly reported National Association of Securities Dealers Automated Quotations systems or by Pink Sheets LLC.
Impairment of a Security
An impairment of Teton Co.’s security shall be reported in other comprehensive income after unrealized holding gains and losses are removed from earnings. Section 320-10-35 states that impairments of securities can only be reported if they are “more than temporary”, meaning that it is unlikely to increase above this amount again. This involves a debit to Loss on Impairment and in order to decrease the security’s Fair Value a credit to the Security.
Selling an Investment When Classified as Held-to-Maturity
If Teton Co. has the intent to and ability to hold the securities until maturity. Section 320-10-25 addresses how close to maturity they can sell an investment. As long as Teton Co. has a predetermined point before maturity, they are able to transfer all of the securities to available-for-sale. This scenario is if Teton