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This proposed statement of position (SOP) provides guidance on applying generally accepted accounting principles in reporting by financial institutions of debt securities held as assets. Briefly, the proposed SOP recommends the following: 1. A financial institution should designate debt securities held as assets as investments, assets held for sale, or trading assets at acquisition and at each subsequent balance sheet date. 2. A financial institution should designate debt securities as investments and report them at amortized cost only if it currently has the ability to hold the securities to maturity and it intends to hold them for the foreseeable future, as defined in this exposure draft. 3. Debt securities that do not meet the criteria for classification as investments and that are not trading assets should be reported in a separate asset category as assets held for sale at the lower of their amortized cost or market value. 4. A decline in value of debt securities that is other than temporary should be reported as a realized loss and should result in reducing the reported amount of the debt securities to a new historical cost basis. The provisions of this proposed Statement would be effective for financial statements for periods ending on or after December 15, 1990.
Securities -- United States -- Accounting; Financial institutions -- United States -- Accounting; Assets (Accounting)
Accounting | Taxation
American Institute of Certified Public Accountants. Accounting Standards Executive Committee, "Proposed statement of position : reporting by financial institutions of debt securities held as assets;Reporting by financial institutions of debt securities held as assets" (1990). Statements of Position. 534.