micah corporation purchased an 850500 investment in the common shares of fortune corporation on 15 july 20×5

Required:
1. Assume that the Fortune Company FVTPL shares are carried at cost at the end of 20X5. Why might cost be appropriate? What criteria must be met for a subsequent value lower than cost to be recorded?
2. When the fair value of an investment written down subsequently increases, is the increase in value recorded? Is net income affected? Explain.
3. List the accounts and amounts that would appear in earnings and the statement of financial position for 20X5 to 20X8, inclusive. Assume that the management estimate of fair value was accepted as valid in 20X6. What evidence would be used to establish validity?
4. Repeat requirement 3 assuming that the investment was designated FVTOCI when it was initially acquired.