Banks May See DVA Changes as Gains Predicted for Second Quarter
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Changes in fair value in the debt of U.S. banks, which have caused multibillion-dollar swings in the earnings of lenders such as Morgan Stanley and JPMorgan Chase & Co., soon may cease to show up in net income.
Gains and losses resulting from the changes, known as debt valuation adjustments, should appear in other comprehensive income instead of earnings, the Financial Accounting Standards Board decided in a meeting last month. Christine Klimek, a FASB spokeswoman, said the group probably will release a proposal in the fourth quarter and a public-comment period will follow.