If the Fair Value of a Debt Investment That Is

Multiple Choice

If the fair value of a debt investment that is classified as an available-for-sale investment declines for a reason that is viewed as "other than temporary" because the company has incurred a credit loss on the investment:

A) The investment is written down to fair value, and only the noncredit-loss component of the impairment loss is recognized in net income.
B) The investment is written down to fair value, and the entire impairment loss is recognized in net income.
C) The investment is written down to fair value, and only the credit-loss component of the impairment loss is recognized in net income.
D) The investment is written down to fair value, but none of the impairment loss is recognized in net income.