How much should be recognized as trading securities

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On December 29, 2018, Karen Company commit itself to purchase a financial asset to be classified as held for trading for Php 600,000, its fair value on commitment date. This security has a fair value of Php 601,000 and Php 602,000 on December 31, 2018 (its bifurcation year end) and January 5, 2019 (settlement date), respectively.

Problem 1: If bifurcation applies the trade accounting method to account for regular-way purchases of its securities, how much should be recognized as trading securities on December 31, 2018?

Problem 2: If bifurcation applies the settlement date accounting method to account for regular-way purchases of its securities, how much should be recognized as trading securities on December 31, 2018?

Reference no: EM132759316

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