Publication Date


Document Type


First Advisor

Norton, Curt

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy


The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards 115: Accounting for Certain Investments in Debt and Equity Securities in response to concerns about how to present the investments on the financial statements. The statement was meant to provide clear requirements for footnote disclosure and provide better relevance for comparisons by using the fair value instead of the lower of cost or market to value the investments. The determination of how to classify the investments is made by management. Management's intent is a subjective criteria and has caused more confusion in the industry. The purpose of this paper is investigate the impact of SFAS 115 on the industry and discover how the investments are classified by management. The information in this paper is supported by several Annual Reports and AICPA issued documents. The overwhelming result of this investigation is that the majority of Annual Reports classify the investments as Available for Sale. When management only uses one classification for the investments, the FASB' s intent on clearly identifying the type of investments loses its purpose.


19 pages




Northern Illinois University

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