2017 Fall Q14 - Net Investment Income & Other Comprehensive Income
Hi,
The solution from the examiner report calculates the Net Investment Income as
SUM of
1. interest income from investment
2. realized gains/losses from fair value option assets
3. unrealized gains/losses from fair value option assets
4. realized gains/losses from available for sale assets
5. realized gains/losses from held to maturity assets
minus investment expenses.
I would like to ask
1. why do we ONLY include the unrealized gains/losses from fair value option assets for investment income?
2. why do we ONLY include the unrealized gains/losses from available for sale assets for Other Comprehensive Income?
Thank you for looking into the questions.
Comments
I see you are going through the examiner's report solutions very carefully!
Side Note: Going through the old exam problems very thoroughly is a great way to study! By the time you get to the actual exam, I highly recommend you know the answers to the last 4-5 exams extremely thoroughly. That's because there's lots of repetition in the questions from year to year.
Anyway, back to your question:
The part of the solution you're asking about depends on a reading that is no longer on the syllabus, so they should not require you know this. (The wiki article for the outdated reading is CIA.Accting and has been archived but you can still look at it if you want.)
Check footnote number 3 to the Battle Table for that particular question in the CCIR.ARinstr wiki article. Note also that in the Battle Table, that question is highlighted in tan. This is my way of indicating when an exam question is out-of-date.
Thank you Graham!
Hi Graham,
If the piece you refer to above has been removed from the syllabus... how can we know how to calculate OCI?
You're right that you wouldn't be able to calculate OCI. You would have to be given the value of OCI directly. I added a note about that below the BattleTable. It's footnote 3: