Derrick,
Perhaps others on this thread will not be surprised by the following
but it is quite an eye opener to me. SEE;
Industrial Bank of Japan to Value Stocks at Purchase Prices
Tokyo, Sept. 21 (Bloomberg) -- Industrial Bank of Japan Ltd., one of
three major Japanese banks that still values its stockholdings at market prices when figuring its earnings,
said it will switch to purchase-price accounting from the end of
September.Starting this year, Japan's finance ministry no longer
requires banks to post losses incurred when the value of a stock dips
below the price at which it was bought. Instead, the banks can value
their equity portfolios at purchase price until the shares are
actually sold.
All of Japan's other 19 nationwide lenders besides Bank of
Tokyo-Mitsubishi Ltd. and Mitsubishi Trust and Banking Corp. had
already switched to purchase-price accounting for stockholdings
during the last business year, after plunging share prices threatened
them with heavy losses. Critics say the revised accounting practices
make it harder to judge the banks' financial health.
IBJ's move will protect the bank from taking losses due to '
'the influence of temporary stock movements at the end of a reporting
period,'' the bank said in a press release.
Japan's benchmark Nikkei 225 index, which fell to a 12-year low of
13,597.30 today, has dropped almost 18 percent since the end of the
last reporting period on March 31.
Regards,
Tundra |
