Answer: Results in recognition of unrealized gains and losses in earnings of a business entity
Explanation:
The election of the fair value option (FVO) for financial assets results in recognition of unrealized gains and losses in earnings of a business entity. The fair value option puts into consideration the unrealized gains and losses in earning of a business for financial assets.
For example, an election date occurs when an entity recognizes an investment in equity securities with readily determinable fair values issued by another entity.
