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FASB issues guidance on investments in securities.

The Financial Accounting Standards board has issued a special report, A Guide to Implementation of Statement 115 on Accounting for Certain Investments in Debt and Equity Securities, designed to answer questions about the standard that have arisen since its May 1993 issuance.

Statement no. 115 specified the accounting for investments in equity securities with readily determinable fair values and for all debt securities, classifying these investments in three categories--debt securities to be held to maturity, debt and equity securities held mainly to be sold in the near term and other debt and equity securities. Since the statement was issued the board has received many inquiries about its implementation from preparers and auditors--particularly about the initial classification of securities and the effect of subsequent changes in circumstances. This report presents questions and answers organized by the general subjects covered in the statement.

The board also issued another special report, Provisions: Their Recognition, Measurement, and Disclosure in Financial Statements, on how to account for liabilities with uncertain amounts and timing of settlement. This report was prepared in conjunction with the Australian, Canadian and United Kingdom Accounting Standards Boards and the International Accounting Standards Committee. (See "IASC Issues Discussion Papers on Hedging and Provisions," page 17.)

How to order

Copies of the Statement no. 115 guide (product code SQAL 15) and the provision report (product code SR-PROV) are available for $11 each from the FASB Order Department, 401 Merritt 7, P.O. Box 5116, Norwalk, Connecticut 06856-5116; (203) 847-0700, ext. 55
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Title Annotation:Financial Accounting Standards Board
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Feb 1, 1996
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