Reading Verification Form
Chapter 12 and Fair Value Supplement
Spiceland, Sepe, and Tomassini

1. Identify and define the three categories into which debt securities are grouped for valuation and reporting purposes. How are each of these categories accounted for?
 
 
 
 
 
 
 
 
 
 

2. For which classes of securities should the equity method be used? How are dividends recorded on the investor's books under the equity method?
 
 
 
 
 
 
 
 
 
 

3. When should the fair value method be used for equity securities? How are equity securities for which the fair value method is used accounted for?
 
 
 
 
 
 
 
 
 
  4. For what types of investments can a company elect to use the fair value method? If a company elects the fair value method for an investment, can the company discontinue the fair value method in the future?