Microsoft corporation reports its investments

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Microsoft Corporation reports its investments available-for-sale at the fair value of the investment securities. The net unrealized holding gain is not reported in the income statement. Instead, it's reported as part of Other comprehensive income and added to Accumulated other comprehensive income in shareholders' equity. Comprehensive income is a broader view of the change in shareholders' equity than traditional net income, encompassing all changes in equity from non-owner transactions. Microsoft chose to report its Other comprehensive income as a separate statement in a disclosure note in its annual report: MSFT Annual Report 2011 What does Microsoft mean by the term "Reclassification adjustment for gains included in net income"? Can you think of an instance where reclassification adjustment could be used unethically?

Reference no: EM13480471

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