SEC Agrees to Accounting Shift Sought by U.S. Banks Which Will Allow Them to Keep Pretending that They Haven’t Been Wiped OutOctober 16th, 2008
The U.S. Securities and Exchange Commission agreed to back an effort by banks that may let them delay writedowns on a type of security that has declined in value during the collapse of the credit markets.
Banks in limited cases may account for so-called perpetual preferred securities as debt, letting them wait to write down their value, SEC Chief Accountant Conrad Hewitt wrote yesterday to Financial Accounting Standards Board Chairman Robert Herz. Hewitt’s interpretation can be used immediately in valuing the securities, which are issued without maturity dates.
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