gains and losses from changes in fair value are simply understood as the difference between fair value and book value, and generally appear in investment real estate and transactional financial assets. So what about the accounting treatment related to the change of fair value profit and loss?

accounting treatment of changes in fair value

fair value rises (fair value is greater than book value)

debit: trading financial assets-changes in fair value

loan: changes in fair value

fair value declines:

debit: changes in fair value

loan: changes in fair value

. Investment income (difference, which may also be debited)

At the same time:

Borrow: fair value change gain and loss

Loan: investment income

Loan: fair value change gain and loss

Fair value change gain and loss refers to the measurement of an asset after acquisition, that is, when the fair value measurement mode is adopted subsequently. The "loss" of the change in fair price is the loss, which means the loss; "Benefit" is income, which means surplus. Gains and losses from changes in fair value are "losses" or "gains" caused by changes in fair value.

how to calculate transactional financial assets?

tradable financial assets mainly refer to financial assets held by enterprises for sale in the near future, such as stocks, bonds, funds, etc. purchased by enterprises from the secondary market for the purpose of earning price difference. An enterprise should set up the subject of "transactional financial assets", which accounts for the financial assets held by the enterprise at fair value and whose changes are included in the current profit and loss, including bond investment, stock investment, fund investment, warrant investment held for trading purposes and financial assets directly designated at fair value and whose changes are directly included in the current profit and loss.

this course should be accounted for in detail according to the categories and varieties of trading financial assets, including "cost" and "changes in fair value", and the "gains and losses from changes in fair value of trading financial assets of enterprises" should be accounted for in the current profits and losses. The debit balance at the end of this course reflects the fair value of the trading financial assets held by the enterprise at the end of the period.