TO: To. T. Big t. Incorporated
BY: Xiaoqian Kang
DATE: Dec. 31, 20X1
SUBJECT: Decide the amount of other-than-temporary impairment (OTTI)
U. T. To. Incorporated, principally engaged in the manufacture and sale of clothes, has 6 investments remaining in the department's portfolio as of December 31. According to ASC, this kind of memo evaluates whether any kind of its opportunities are other-than-temporary impaired, and determines the amount of the disability.
Expense 1 -- Happy New Year & Company.
OTT bought 11 shares of Completely happy New Year & Co. stock on by $20 a share on Jan. 3, 20X1, plus the price fallen to $15 in 03 and remained steady until Dec. 23, 20X1. OTT management will not believe the decline in cost to be permanent and features asserted that it does not intend to sell this kind of investment down the road. Expense 2 – Beary Beary
OTT placed notes of Beary Beary with an amortized cost of $95 and a fair benefit of $88 on December. 31, 20X1. OTT's expenditure committee set up a policy demanding the sale of the security if the fair value declines listed below $90. Investment 3 – Buy-A-Lot Business
OTT kept bonds of Buy-A-Lot Organization with a great amortized expense of $100 and a fair benefit of $88 as of December 31, 20X1. The company's credit score upgraded via BBB to BBB+ that management provides asserted it will not intend to offer this investment. Investment four – March Madness Included
On 03 25, 20X1, OTT bought 50 stocks of 03 Madness Designed stock at $100 a share, classifying its purchase as available for purchase. As of 12 , 31, 20X1, the price of the stock was $72. In January thirty-one, 20X2, the date the Company's financial transactions are issued, the price of the stock went up to $75.
Purchase 5 -- Tohoku Toys and games
OTT organised bonds given by Tohoku Toys with an amortized cost of $25 and a reasonable value of $5 since December thirty-one, 20X1. Tohoku Toys is going through a restructuring because it was significantly troubled by a serious...