Bank of America will restate earnings going back to 2002 to adjust for the accounting of certain derivative transactions related to hedging interest rate risk and foreign exchange exposure.
The adjustments, which pertain to Financial Accounting Standard 133, will increase earnings by $345 million over that period. Bank of America said its financial strength will not be adversely affected by the restatement.
"The interpretations of how to apply FAS 133, a quite complex standard, continue to evolve," said chief financial officer Alvaro de Molina, in a statement.
Bank of America's review of recent interpretations of the accounting rule led Bank of America to decide that certain of its hedges did not warrant "short cut" treatment under FAS 133, he said. In those cases where the short cut method didn't apply, Bank of America decided it had to run fluctuations in the value of hedging instruments through its earnings statement.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access