Premium
Declines in market value of investment securities: Recent SEC enforcement actions cast a wide net
Author(s) -
Zuckerman Jeffrey R.
Publication year - 1992
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970040203
Subject(s) - business , enforcement , accounting , investment banking , broker dealer , hybrid security , security market , financial system , commission , equity (law) , private placement , loan , finance , political science , law
In the wake of the savings and loan crisis, the Securities and Exchange Commission turned its attention to accounting and reporting for other than temporary declines in the market value of bank and thrift equity securities held by financial institutions. Recently, for the first time, the SEC has shifted the focus to junk bonds. The failure to account for investment securities in accordance with GAAP can result in material overstatements of assets or income and trigger enforcement action by the SEC. This article analyzes several recent cases and discusses their implications for future accounting and reporting by public companies.