Types of investment:- There are three types of investment
i) Available-for-sale
ii) Trading
security
iii) Held to Maturity Security
i) Investment in
Available-for-sale securities:- Available-for-sale means the investment which is not held in active trading account
for immediate resale nor to be held to maturity. This type of investment is
reported at fair value and the unrealized gain and loss is recognized and
reported directly in shareholders’ equity.
ii) Investment in Trading
securities:- Trading
securities means the investment held in active trading account for immediate
resale. This type of investment is reported at fair value and the unrealized
gain and loss is recognized in statement of comprehensive income or profit and
loss account.
iii) Investment in Held to maturity Securities:- Held to maturity Securities means which is held until maturity. This type of investment is reported at cost value and the unrealized
holding gain and loss is not recognized.
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