Associate general counsel of the sec

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Reference no: EM131786940

The following quote is taken from Phillip D. Parker (Associate General Counsel of the SEC), "Market Value Accounting-An Idea Whose Time Has Come?" in Elliot P. Williams (ed.), Managing Asset/ Liability Portfolios (Charlottesville, VA: Association for Investment Management and Research, 1991), published prior to the passage of FASB 115:

The use of market value accounting would eliminate any incentive to sell or retain investment securities for reasons of accounting treatment rather than business utility.

Explain why this statement is correct. (Note that in historical accounting a loss is recognized only when a security is sold.)

Reference no: EM131786940

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