First Federal Finance Co. has a large investment securities portfolio. In the old days, First Federal was

Question:

First Federal Finance Co. has a large investment securities portfolio. In the “old days,” First Federal was allowed to value these securities at the lower of cost or market. Statement of Financial Accounting Standards No. 115 now requires current market valuation on the for most securities. As a banker, you do not consider current value reporting to be necessary. Indeed, you feel it unfairly harms your reported performance. As a banker, why would current value accounting be threatening to you? How would you respond to these concerns if you were a member of the FASB?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...