How did the dissenters to want to deal with the

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SFAS No. 115 defines held-to-maturity securities as debt securities that the firm “has the positive intent and ability to hold those securities to maturity.” Trading securities “are bought and held principally for the purpose of selling them in the near term....”Available-for-sale securities are simply everything else.

SFAS No. 115 requires held-to-maturity securities to be valued at amortized cost with the other two carried at fair value. Unrealized gains and losses on trading securities are recognized in net income but for trading securities unrealized gains and losses are recognized as other comprehensive income and as a separate part of owners’ equity.

Two members of the FASB voted against the standard. They wanted the three types of securities to be carried at market value and unrealized gains and losses of the three “types” to go through income.

Required :

Evaluate the Board’s attempt to use a finite uniformity approach to the investments covered in the standard. How did the dissenters to SFAS No. 115 want to deal with the problem?

Reference no: EM13315854

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