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Statement of Financial Accounting Standards No. 130 - page 53 / 57





53 / 57

reclassification adjustments on the face of the financial statement in

which comprehensive income is reported, or it may disclose reclassification

adjustments in the notes to the financial statements.

133.  This appendix provides illustrations of the calculation of

reclassification adjustments for Statement 115 available-for-sale

securities.  Illustration 1 is of available-for-sale equity securities, and

Illustration 2 is of available-for-sale debt securities.  The illustrations

are intended as examples only; they do not represent actual situations.

134.  Illustrations 1 and 2 involve a nonpublic enterprise that follows the

practice of recognizing all unrealized gains and losses on available-for-

sale securities in other comprehensive income before recognizing them as

realized gains and losses in net income.  Therefore, the before-tax amount

of the reclassification adjustment recognized in other comprehensive income

is equal to, but opposite in sign from, the amount of the realized gain or

loss recognized in net income.

Illustration 1:  Statement 115 Available-for-Sale Equity Securities

135.  The available-for-sale equity securities in this illustration

appreciate in fair value.  On December 31, 1997, Enterprise purchased 1,000

shares of equity securities at $10 per share, which it classified as

available for sale.  The fair value of the securities at December 31, 1998

and December 31, 1999 was $12 and $15, respectively.  There were no

dividends declared on the securities that were sold on December 31, 1999.

A tax rate of 30 percent is assumed.

                           Calculation of Holding Gains

                                            Before    Income     Net of

                                             Tax        Tax


Holding gains recognized in other

comprehensive income:

   Year ended December 31, 1998             $ 2,000    $   600   $ 1,400

   Year ended December 31, 1999               3,000        900     2,100

Total gain                                  $ 5,000    $ 1,500   $ 3,500

                                            =======    =======   =======

 Amounts Reported in Net Income and Other Comprehensive Income

  for the Years Ended December 31, 1998 and December 31, 1999

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