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This research investigates how accounting rules for futures contracts affect earnings variability in commercial banks and brokerage firms.

Accounting for Futures Contracts and the Effect on Earnings Variability.

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Analysis reveals accounting rules influence earnings variability in commercial banks and brokerage firms, indicating a need for review.

This research investigates how accounting rules for futures contracts affect earnings variability in commercial banks and brokerage firms.
Examine SFAS No. 80 and its requirements for recognizing market changes in futures contracts
Assess the impact of accounting practices on earnings variability
Analyze the perspectives of commercial banks and brokerage firms on current regulations
Current accounting rules increase earnings variability for entities involved in futures contracts
Hedging interest rate exposures shows differing effects on reported earnings
Implications for the need to reconsider accounting regulations to stabilize earnings

Jennifer Francis (1990) studied this question.

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