-balance depreciation method would reduce the bonuses of management, and may be the reason they decided to change to the straight-line depreciation method.
3. a) Wecker's bonus will depend on the classification of the debt securities because her bonus is computer as a percentage of the company's net income. Debt securities classified as being held-to-maturity are reported at the amortized cost (CUNA, 2003). There is no reflection of the impact of temporary fluctuations in fair value of the debt securities in the Company's financial statements. However, debt securities classified as available-for-sale are reported at fair value. Changes in the fair value of available-for-sale debt securities from period to period are not reported as part of the company's net income: instead they are charged or credited directly to equity. This means the company's net income will not be affected by debt securities classified as held-to-maturity, but it will be affected by the debt securities classified as held-for-sale because these will be reported at fair valu
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