traded debt and accounting gain

Discussion in 'Exams and Studying' started by marcot, Jan 23, 2019.

  1. marcot

    marcot

    Joined:
    Jan 23, 2019
    Messages:
    1
    Likes Received:
    0
    Hello, I was going over a Ft paper ("Two reviews have not solved Britain's audit problem") and I found a part not so clear to me:

    "Part of the problem is the way the system has evolved to set ever more “clear” and precise written rules to make listed company accounts “value relevant” for investment analysts. Some of these are simply bizarre, such as the circular rule where a company’s falling share price leads to a decline in its creditworthiness. The reduction in the value of its traded debt is treated as an accounting gain"

    How is it possible to register a gain if your stock is losing? It seems to be a paradox...

    Thanks a lot in advance!
     
    marcot, Jan 23, 2019
    #1
    1. Advertisements

  2. marcot

    Fidget VIP Member

    Joined:
    Jan 6, 2013
    Messages:
    521
    Likes Received:
    80
    Location:
    UK
    They're not the same thing. So one can increase whilst the other decreases.
     
    Fidget, Feb 3, 2019
    #2
    1. Advertisements

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments (here). After that, you can post your question and our members will help you out.