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Statement No. 12
Accounting for Certain Marketable Securities
STATUS
Issue Date: December 1975
Effective Date: For fiscal periods ending on or after December 31, 1975
Affects: No other pronouncements
Affected by: Paragraph 22 amended by FAS 96 and FAS 109
Superseded by FAS 115
Other Interpretive Pronouncements: FIN 10 (Superseded by FAS 83)
FIN 11 (Superseded by FAS 115)
FIN 12 (Superseded by FAS 115)
FIN 13 (Superseded by FAS 115)
FIN 16 (Superseded by FAS 115)
FIN 40
FTB 79-19
FTB 85-1
Abbreviations for Accounting Pronouncements
FAS - FASB Statements
FIN - FASB Interpretations
FTB - FASB Technical Bulletins
APB - APB Opinions
AIN - AICPA Interpretations
ARB - Accounting Research Bulletins
CON - FASB Concepts
EITF - EITF Issues
Q&A - FASB Implementation Guides
SUMMARY
This Statement requires most businesses to carry marketable equities at lower of portfolio cost or market value. A company has two portfolio classifications for this purpose, current and noncurrent. For the noncurrent asset portfolio, writedowns for market-value declines (and writeups for recoveries) not yet realized by sale are made to a separate component of equity and not to net income. For a current portfolio, writedowns and recoveries are included in net income.
Realized gains and losses on both current and noncurrent portfolios are included in net income. Mutual funds, broker-dealers, insurance companies, and banks retain their special accounting methods, with some improvements. Results of different methods used by subsidiaries in those industries are retained in consolidation.
Copyright by Financial Accounting Standards Board. All Rights Reserved. Used by Permission
©2000 New York State Society
of Certified Public Accountants. Legal Notices.
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