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To: kahunabear who wrote (5316)	6/1/1998 1:27:00 PM
From: Boca_PETE	Read Replies (1) \| Respond to of 42834

WS: RE: < feeling on whether book value SHOULD be some reflection of the value of net assets(assets minus liabilities) > At this very moment, the Financial Accounting Standards Board is working on a project with the objective of reflecting all financial instruments on the balance sheet at "fair value". See more at the below link: rutgers.edu During the 1980's, investors would have been warned earlier had the been a requirement to reflect fair values of financial instruments on the balance sheet. Therefore, it's probably a positive step to enact such a requirement, ( Imho ). However, there are complications in reporting such fair values when downgrades in credit quality of long-term debt instruments of an issuer result in earnings gains on the issuer's balance sheet. RE: < if a balance sheet is not always a good representation of assets and liabilities, then perhaps the income statement is not always an accurate representation of earnings.> Starting for 1998, we now have the requirement to disclose the details of something called "Other Comprehensive Income" - all those nonowner changes in equity that bypass the income statement finding their way into the "stockholders' equity" section of the balance sheet. Examples are certain currency translation adjustments, minimum pension liability adjustments, unrealized net gains or losses on certain investments, and starting in the year 2000 (if we get past it), certain hedge gains and losses. The thing to remember is accounting is AN ART, not a science. United States accounting and reporting requirements are the most sophisticated requirements in the world today by far. P