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T.F.R. ENTERPRISES, INC.AND SUBSIDIARIES <br /> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br /> NOTE E—FAIR VALUE MEASUREMENT—continued <br /> The level 3 investments are valued at the historical average sales price for individual coins.The valuation <br /> for unrealized gain or loss is presented on the balance sheet as accumulated other comprehensive income. <br /> The reconciliation of accumulated other comprehensive income for the years ended December 3I, 2017 <br /> and 2016 are as follows: <br /> Accumulated <br /> • Other <br /> Comprehensive <br /> (Loss) <br /> Balance at January I,2016 $ (2,830,950) <br /> Reclassification from realized losses from: <br /> Sale of gold coins,net of tax 290,311 <br /> Theft of Hold coins,net of tax 1.488.981 <br /> Balance at December 31,2016 S (1,051.658) <br /> Balance at December 31.2017 $ (1,051.658) <br /> NOTE F—LOSS FROM THEFT <br /> During the year ended December 31, 2016, the Company suffered losses due to theft of gold coins. The <br /> cost basis of the coins was S1,747,950.This amount has been recognized as a current period loss during the <br /> year ended December 31. 2016 on the Consolidated Statements of Income. <br /> NOTE C—INCOME TAXES <br /> The Company is taxed as a C-Corporation and accounts for income taxes whereby deferred taxes are <br /> provided on temporary differences arising from assets and liabilities whose basis are different for financial <br /> reporting and income tax purposes. • <br /> Deferred taxes result primarily from timing differences in the recognition of net operating losses,allowance <br /> for doubtful accounts, and depreciation expenses for tax and financial reporting and from reporting for <br /> federal income tax purposes on the accrual basis method of accounting. Depreciation expense for financial <br /> reporting is computed using the straight-line method, however, for tax purposes. the modified accelerated <br /> cost recovery system (MIACRS)is followed. <br /> 14 <br />