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What is the effect of a company electing the fair value option with respect to an...

What is the effect of a company electing the fair value option with respect to an investment that otherwise would be accounted for using the equity method?

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The effect is that they are reclassified as trading securities.In accounting we classify and value securities depending on what the company plans to do with them. There are three different classifications : Trading ,held for maturity and available for sale securities. Each will have a different accounting treatment. As trading securities are valuing at fair value rather at a face value.

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