Volume 2, No. 7


For Marketable Securities: Market Value Is Now The Rule:  The new standard concerning investment accounting for debt and equity securities expands the use of fair value accounting for these assets. The standard provides three categories of investments: held-to-maturity securities, trading securities and securities available-for-sale. Improved disclosures will assist analysts in determining the extent of "gains trading", and also provide help in assessing the quality level of securities held by firms. However, the standard also may introduce volatility into the capital section of the balance sheet; analysts and investors should prepare themselves now, for this standard will be effective in 1994.

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