Thursday, October 13, 2011

JP Morgan Debt Valuation Adjustment

[R]esults may include gains taken under a U.S. accounting rule known as Statement 159, adopted by the Financial Accounting Standards Board in 2007, which allows banks to book profits when the value of their bonds falls from par.

The rule expanded the daily marking of banks’ trading assets to their liabilities, under the theory that a profit would be realized if the debt were bought back at a discount.

All American Investor

Original content Bob DeMarco, All American Investor